Another ATO Tax Refund Email Scam

The Tax Office is again warning people about a fraudulent email being circulated that claims to offer a refund from the Tax Office.

The email is similar to previous scams from March, June and October which fraudulently uses the Tax Office logo and the words ‘Australian Taxation Office – Notification’ or ‘Australian Taxation Office – Please Read This’ in the subject line.

There may also be more variations to these subject headings.

The email asks people to click on a link which redirects them to a bogus website that looks similar to the Tax Office website and asks for credit card and personal details.

The email and website are not affiliated with the Tax Office in any way.

Acting Second Commissioner Bill Gibson said anyone who receives the email should delete it immediately.

“People should be wary of unsolicited emails claiming to be from the Tax Office.

“The Tax Office will never send emails to people asking them to provide personal information including credit card details.

“As an extra precaution we recommend you type internet addresses directly into your internet browser rather than clicking on hyperlinks embedded in emails,” Mr Gibson said.

If people have entered their credit card information on the website, they should contact their credit card provider as soon as possible and report a possible compromise.

Your Student HELP Debt 2006-07

What is a HELP debt?
From 1 January 2005, the Higher Education Loan Programme (HELP) was introduced, replacing the Higher Education Contribution Scheme (HECS). You will be required to start repaying your HELP debt when your repayment income is above the minimum threshold for compulsory repayment. HELP includes:

• HECS-HELP
• FEE-HELP
• OS-HELP

When do you start repaying your debt?
You must start repaying your debt when your repayment income is above the minimum threshold for compulsory repayment. The repayment thresholds are adjusted each year to reflect any changes in average weekly earnings. For the 2005–06 income year the minimum threshold was $36,184 and for the 2006–07 income year it is $38,148.

Compulsory repayments are made through your income tax assessments.

You don’t have to provide HELP information in your tax return. If you have a debt, and your repayment income is above the minimum repayment threshold, the Tax Office will work out and include your compulsory repayment in your notice of assessment.

NOTE:

If your repayment income is above the minimum repayment threshold you must start repaying your debt, even if you are still studying.

Superannuation & Your Tax File Number

From 1 July 2007 super funds or retirement savings accounts without their member's tax file number (TFN's) will be unable to accept personal contributions.

Some people will have received reminders about this from the A.T.O or their fund. If you haven't received a letter yet and are unsure, check your latest member contribution statement to see if your fund has your TFN.

Know Your Tax Offsets: Mature Age Worker

A relatively recent rebate is the Mature Age Worker Tax Offset.

What is it?
The mature age worker tax offset was introduced in the 2004-05 financial year to "reward and encourage" mature age workers who decide to stay in the workforce.

Am I eligible?
If you are an Australian resident, have received net income from working and are aged over 55 years, you may be eligible for the Mature Age Worker Tax Offset (MAWTO).

What is net income from working?
Your net income from working is used to calculate the amount of MAWTO you are entitled to. Basically, this is your income from working less any allowable deductions.

What income counts?
Income from working includes such items as salary and wages, income from a business you carry on, personal services income and reportable fringe benefits.

Which income doesn't count?
"Net income from working" does not include any social security payments, interest and dividends, super, capital gains, rental income or eligible termination payments. The amount of income you have received from the items not included as "income from working" does not affect your eligibility for this offset.

How much is it?
The maximum MAWTO entitlement is $500. This offset can only reduce your tax liability to nil; meaning any unused portion cannot be transferred or refunded.

How much will I get?
This depends upon your net income from working. The following rates apply depending on which bracket you fall into:

Under $10,000 = calculated at 5 cents per dollar from 0 - $9,999.
$10,000 - $53,000 = $500
$53,000 - $63,000 = reduced by 5 cents per dollar over $53,000.
Over $63,000 = nil

How do I get it?
If you qualify, the Tax Office will use the informaiton provided in your tax return to assess and apply your offset.

How Do They Work? "Tax Deductions"

A common misconception I hear people say regarding certain expenses or giving is, "it's okay, I'll get it all back at tax time." Well, that's not exactly true and, strictly speaking you do not "get it back" at all. So what does a deduction do...

How do deductions work?

A tax deduction reduces the amount of income you have to pay tax on. The Tax Office does not reimburse you for your expenses nor can you deduct these from your tax amount. Tax deductions are taken off your total income to get your 'taxable income' - the amount your tax is calculated on.

Income - Deductions = Taxable Income

Example:

Sally has income of $25,000. The tax payable on this amount is $2,850. Now suppose that Sally also has $400 in deductions. This reduces her taxable income to just $24,600. Tax payable on $24,600 is $2,790.

In this example, deductions of $400 have saved Sally $60 in tax (Sally is taxed at the 15% tax rate).

Please note this is a simplistic example given as a guide to understand how the deductions work and does not take into account other factors such as offsets previous losses, the Medicare levy, etc.

How much of a saving?

The individual tax saving as a result of deductions will vary depending upon what tax bracket a person is in. If your taxable income is less than $6,000 you would not receive any benefit from a deduction as your income is below a taxable level.

As the average Australian is in the 30% tax bracket, the best most of us can hope to recoop of our allowable deductions is just 30 cents in the dollar; better than nothing but a long way from "getting it all back at tax time."

Track Down That Lost Super!

Are you one of the 4.3 million Australians with lost or unclaimed superannuation?

Most of us would have no idea how much super we have lost track of, where it is or how to go about claiming it.

The Australian Taxation Office has a service they call Superseeker.

SuperSeeker is a tool that will look for your lost superannuation in real time and instantly provide you with possible matches.

To begin the Superseeker online search you will need to provide your:

• tax file number


• name, and


• date of birth

It's your money so go and claim it!

Neglected Tax Deduction #1

Okay, so most of us know what we can claim on our tax returns (or at least what we usually claim) but there are still a lot of deductions that go neglected by people year after year.

Did you know?

Most taxpayers are aware they can claim a deduction of their accountant's fee for preparing their return. We call that a "cost of managing tax affairs."

What a lot of people fail to factor in is the cost of travel to and from the accountant. Yep, you can claim that too.

Child Care Budget Changes #2

The second 2007-08 Budget initiative relating to child care comes in the form of changes to the way parents currently claim the child care tax rebate.

2. The Government will bring forward payment of the Child Care Tax Rebate (CCTR) and pay it through the Family Assistance Office (FAO) at the end of each financial year. This means eligible families will receive the rebate soon after the end of the financial year - a lot easier than the current way of having to wait and claim it the following year.

Who will benefit?

The change will benefit all working families who receive CCB for approved child care. These families will now be able to receive a payment equivalent to 30% of their out-of-pocket expenses up to $4,000 indexed per child per year for approved child care at an earlier time. The payments will begin from September 2007 for child care expenses incurred in the 2006-07 year.

Good News!

Families who incurred child care expenses in both the 2005-06 and 2006-07 years will receive two rebates in 2007-08, potentially totalling up to $8,000 (indexed) per child! The first rebate will be received as part of their tax assessment, while the second will be received as a direct payment from the FAO.

How do I get it?

For child care costs incurred in 2005-06 you still need to keep your paperwork and claim the Child Care Tax Rebate (CCTR) in your 2006-07 tax return. For child care costs incurred after 1 July 2006 the FAO will pay the CCTR directy into your bank account after you have lodged your tax return.

Know Your Tax Offsets: Net Medical Expenses Over Threshold

Alan and I have three beautiful children ages 4, 6 and 8. Let's face it; children are expensive! Keeping track of some of these expenses can pay off when tax time comes around.

The Tax Office has found that many people are still not taking advantage of a large number of rebates.

20% Tax Offset on net medical expenses over the threshold

One of the most common areas people fail to take advantage is the medical expenses offset. This applies to out-of-pocket expenses (so deduct refunds from Medicare or your health insurer) over the $1,500 threshold. It sounds a lot but it is shockingly simple to reach that amount, especially with a young family or elderly dependents.

Who's included?

The offset applies to you and your dependants. If your household spent over the threshold on unreimbursed medical, you may be able to claim this offset.

What medical expenses count?

Medical expenses can include things like visits to your doctor, hospital, optical, dental, referred physio, prescription medication and even some counselling services.

How much will it be?

The offset amounts to 20% of the amount over the threshold. For instance, if our family had $4,000 of net medical expenses for the year, our offset would be $500 (4,000-1,500 =2,500 x 20% = $500).

It all adds up

It is not difficult for a family to go over the threshold (I single-handedly managed to get us up there just with a little dental work)! It is simple enough to access your medicare statement but you do should be aware of tracking the little things such as prescription medications - they just might be the tipping point to put you over the threshold.

Cash Bonus for Senior Australians

On Tuesday, 8 May 2007 the Commonwealth Government announced details of the Budget for 2007-08.

One-off $500 Payment

• A non taxable one-off payment of $500 will be paid by 30 June 2007 to each person of age pension age eligible for Utilities Allowance as at 8 May 2007.
  


• A payment of $500 will also be paid to each self-funded retiree eligible for the Seniors Concession Allowance as at 8 May 2007.
  
  
• In addition, a one-off payment of $500 will be made to each person eligible for Mature Age Allowance, Partner Allowance and Widow Allowance as at 8 May 2007.