It’s time to start planning. Generally speaking, anyone who earns over the tax free threshold during the course of a financial year, 1 July – 30 June, is required to submit an individual tax return to the Australian Tax Office. You, as an individual, must pay tax to the Government in proportion to your earnings for the financial year period. In addition to the marginal tax income rates that are used to calculate the base amount of tax payable, taxpayers may be eligible to claim deductions or offsets that may further reduce the amount of tax payable. The recent Budget outlined changes regarding the Family Tax Benefit and the Education Tax Refund which have now come into play as of 1 July 2011; not to mention the Flood Levy which will need to be paid in this year’s tax return.
Individual Tax Rates 2011-12
|
Taxable income |
Tax on this income |
|
0 – $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 |
The above rates do not include the Medicare levy of 1.5% and the Flood levy
What is the flood levy?
The government has introduced a Temporary Flood and Cyclone Reconstruction Levy (flood levy) applying to taxable income for the 2011-12 year only. It is designed to assist affected communities to recover from the recent natural disasters by providing additional funding to rebuild essential infrastructure – for example, roads, bridges and schools. The flood levy will only apply to taxable income derived between 1 July 2011 to 30 June 2012.
Who will have to pay the flood levy?
Individual taxpayers, who have a taxable income over $50,000 in the 2011-12 financial year will have to pay the flood levy. This includes foreign residents who have Australian income. Low income earners will not pay the flood levy as it only applies to taxable income you earn over $50,000. If you have a taxable income of $50,000 or less in the 2011-12 financial year, you will not be charged the flood levy. Some people affected by natural disasters will be exempt from paying the flood levy regardless of whether their taxable income is under or over $50,000. There are special rules to work out who is exempt.
Flood Levy Rates
|
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 |
Personal Income Tax Returns
Personal Income Tax Returns address all significant financial transactions by the taxpayer for the year. So this includes not only income from employment and wages but also regular income from investments and rental properties as well as one-off payments as a result of the sale of assets. Additionally, any losses incurred during the period also affect the net amount of taxable income and hence the total amount of tax payable by the taxpayer.
If you are submitting your personal income tax return yourself it must be lodged with the Tax Office by 31 October each year. However, if your return is prepared and lodged by a registered tax agent the deadline is significantly extended. It is important to diligently submit regular tax returns in order to avoid incurring penalties and the increased possibility of being audited.
Here at Quinns we work hard to ensure that our tax clients are aware of what they can and cannot claim on their returns and we work with you to legally minimise the amount of tax that you are required to pay. For more information submit an online enquiry or call us on 1300 QUINNS (784 667) or +61 2 9223 9166 to book an appointment.
