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.

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 #1

According to the Family Assistance Office, a number of the 2007-08 budget initiatives will impact Centrelink and FAO customers.

Two significant changes have been announced in regard to child care. They are both good news for parents.

1. The rate of Child Care Benefit (CCB) will be increased by 10 per cent, on top of the normal CPI increase. As a result of these changes on 1 July 2007 families will receive a total CCB increase of more than 13%. What does that mean in your world? It means up to an extra $20.50 per child per week, for one child in full time care (5 days per week) for low income families.

Who will benefit?

All families who are currently receiving CCB and those who are eligible for CCB in the future will benefit from the additional financial support provided through the CCB changes.

How do I get it?

You don't need to do anything to receive the CCB increase. The Family Assistance Offcie will automatically adjust your entitlement. If you have chosen to receive your payment as a lump sum, it will be paid after you have complete your tax return at the end of the financial year.

More Personal Tax Cuts

According to Budget 2007-08, all taxpayers will benefit from from a further $31.5 billion in tax cuts over the next four years.

Highlights include:

1. From 1 July 2007, the low income tax offset will increase to $750 per year and the 30 per cent threshold will rise from $25,000 to $30,000.




2. From 1 July 2008, the 40 per cent threshold will increase to $80,000 and the 45 per cent threshold will increase to $180,000.

That's great news for next year but what about this tax season? Well, thanks to the May 2006 budget, it's still good news for low income earners.

More taxpayers are likely to qualify for the Low Income Tax Offset (LITO) this year as a result of the offset increasing from $235 to $600 and not starting to phase out until $25,000. So what does that mean for you? It means a reduced offset may be possible up to a taxable income of $40,000.

Medicare Online

Because I am a huge fan of anything that saves me time and hassle, I'm happy to note that Medicare Australia now offers a range of online services.

You do need to register and wait for a password to be mailed to you but once you are set up you can:

• View your medicare tax statement


• Update your personal and banking details


• Request replacement or additional cards


• View your children's immunisation history statements


• Check your Medicare Safety Net balance


• Check your organ donor registration (if applicable)

To register for these online services, simply go to www.medicare.gov.au and follow the links.

Compare Private Health the Easy Way

The Australian Government has introduced a comprehensive, independent website that shows an overview of every available private health insurance product from every fund.

It's controlled and run by the Private Health Insurance Ombudsman and it includes a simple search facility that makes it easy to find and compare all the products that fit your needs.

You can now easily compare private health insurance products at http://www.privatehealth.gov.au/.