CNR Services

New Personal Income Tax Rates:-

Residents

Tax rates 2010-11
Taxable income	Tax on this income
$1 – $6,000	Nil
$6,001 - $37,000	15c for each $1 over $6,000
$37,001 - $80,000	$4,650 plus 30c for each $1 over $37,000
$80,001 - $180,000	$17,550 plus 37c for each $1 over $80,000
$180,001 and over	$54,550 plus 45c for each $1 over $180,000

Non-residents
If you are a non-resident for the full year, the following rates apply:-

Tax rates 2010-11
Taxable income	Tax on this income
0 - $37,000	29c for each $1
$37,001 - $80,000	$10,730 plus 30c for each $1 over $37,000
$80,001 - $180,000	$23,630 plus 37c for each $1 over $80,000
$180,001 and over	$60,630 plus 45c for each $1 over $180,000

Flood Levy

The government has introduced a Temporary Flood and Cyclone Reconstruction Levy (flood levy) applying to income for the 2011-12 year only.

How much will you pay and how?

Taxable income	flood levy on this income
$0 to $50,000	Nil
$50,001 to $100,000	Half a cent for each $1 over $50,000
Over $100,000	$250 plus 1c for each $1 over $100,000

CLAIMING STUDY EXPENSES AGAINST YOUTH ALLOWANCE

Full-time students on Youth Allowance can now claim a deduction for their study expenses. This change is a result of a High Court decision on 11 November 2010.

Expenses you can claim

Study expenses you may be able to claim include:
■ the cost of text books
■ home study expenses
■ the decline in value of your computer (You can only claim the study-related proportion; not the proportion used for private purposes).
You cannot claim contributions you, or the Australian Government, make under HECS-HELP or repayments you make under the Higher Education Loan Program (HELP) or the Student Financial Supplement Scheme (SFSS).

Increasing the Medical Expenses Tax offset threshold

The net medical expenses tax offset currently allows taxpayers to receive a tax offset equal to 20 per cent of net unreimbursed eligible medical expenses above $1,500. The claim threshold is not currently indexed and was last increased in the 2002¬03 income year. The Government intends to increase the threshold for taxpayers claiming the net medical expenses tax offset from $1,500 to $2,000 from 1 July 2010 and commence annually indexing the threshold to the Consumer Price Index with effect from 1 July 2011.

Interest Income Discounted

From the 2011-12 year, individuals will receive a 50% discount on up to $1,000 of interest earned on deposits with banks, building societies and credit unions and on interest generated from investment products such as bonds and debentures. The discount will apply to interest received directly and indirectly (such as from a trust distribution). Only the discounted income amount will be taken into account for the purpose of calculating 'adjusted taxable income'.

REMOVAL OF BABY BONUS

You cannot claim the baby bonus for 2009–10 and future years, but you can claim it for past years (2001–02 to 2008–09) for which you have not already made a claim. Depending on your circumstances, you can lodge a claim (up to 30 June 2014) for the baby bonus either:
■ on the tax return for the relevant year you are claiming, or
■ on the relevant approved form.

REFORMS TO SOME ENTITLEMENTS

Your entitlements could be different this year because the law has changed, if you have a spouse, An additional six new items are required. ATO need this information to assess:
■ your tax offset entitlements
■ your eligibility to certain deductions and tax concessions
■ any Medicare levy surcharge
■ HECS or SFSS repayment amounts.

SAME-SEX COUPLES

For 2009–10 and future years the definition of spouse has changed so that your spouse includes another person (whether of the same sex or opposite sex) who:
■ you were in a relationship with that was registered under a prescribed state or territory law,
■ although not legally married to you, lived with you on a genuine domestic basis in a Relationship as a couple.

INCOME EARNED IN OVERSEAS

EMPLOYMENT
In most cases you will now include your foreign employment income in your assessable income, and you may be entitled to a tax offset for the foreign tax you paid on your foreign employment income. Your foreign employment income is exempt only if you earned the income as an aid worker, as a charitable worker, under certain types of government employment or on projects that are in the national interest.

EMPLOYEE SHARE SCHEMES

For 2009–10 and future years, discounts on shares and rights you acquire under an employee share scheme will generally be included in your assessable income in the income year in which you acquire the shares or rights. However, deferral of the tax liability is possible in limited circumstances. The changes also limit access to the existing tax exemption of up to $1,000 of the total discounts received.

TAXATION OF FINANCIAL ARRANGEMENTS (TOFA)

New taxation of financial arrangements (TOFA) rules have been introduced to modernise the tax Treatment of financial arrangements. The rules do not apply for 2009–10 unless you make an election for this to happen. The rules do not generally apply to individuals. The rules are primarily intended for large entities with complex financial arrangements. You should seek professional advice if you are considering making any elections under these rules. If the TOFA rules apply to you, see ‘Completing the tax return for individuals where the TOFA rules apply’ in ‘Taxation of financial arrangements (TOFA)’ available on ATO website at www.ato.gov.au/tofa

SUPER CO-CONTRIBUTIONS

In order to more accurately assess your super co-contribution entitlements ATO needs to Collect enough details on your tax return. This year to work out your entitlements, ATO will sort amounts on your tax return into eligible income, ineligible income and assessable income.

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