Family Tax Benefit Adjustments in your Tax

This year, FTB reconcilations (top-ups or overpayments) are included in the Notice of Assessment from the ATO and refunds adjusted accordingly.

If you have over-estimated your taxable income, your Family Assistance top-up will arrive in the same payment as your tax refund.

Receiving a nice lump sum can feel like quite a windfall!

However, persons who have been overpaid family assistance throughout the year may be disappointed. FTB overpayments will be deducted from any tax refund due.

While the new way saves waiting for the Family Assistance Office to get around to paying top-ups, unfortunately it doesn't give recipients a clear break-up of the FTB payments included in the reconcilation.

Family Tax Benefit A Supplement

I've received a few queries recently about the Family Tax Benefit Supplement. It is coming to that time of year again when families begin to anticipate this payment and are wondering just how much it will be and when it will be paid.

What is it?
The Family Tax Benefit Part A Supplement is an increase in the annual rate of Family Tax Benefit Part A to be paid as a lump sum after the end of the financial year.

How much?
For the 2006-07 financial year, the payment will amount to $646.05 per child. If you have a child for part of the year or share care, the amount will be proportional to the period or percentage of care.

Who is eligible?
The Supplement is available to all Family Tax Benefit Part A eligible families. Please note that if an overpayment has occurred during the year, the Supplement will be used first to offset outstanding overpayments.

When will it be paid?
Families will be paid the Supplement after family tax returns have been lodged and FTB payments have been balanced for the for the financial year. If you or your partner are not required to lodge a tax return, be sure to notify the Family Assistance Office of this so as not to delay payment.

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 #2

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. Continuing a series on Neglected Tax Deductions, today I mention another oft-forgotten area.

Do you work outdoors?

If the nature of your work causes you to work all or part of the day in the sun, you can claim a tax deduction for your sun protection expenses.

Sun protection includes sunhats, sunglasses and sunscreen lotion.

This ruling is most likely to apply to buiders, labourers, tradespeople, plant operators and others in the building or construction industry.

Understanding Benefits: Family Tax Benefit #1

The Understanding Benefits series will continue with a look at Family Tax Benefit (FTB). This can be a somewhat confusing payment, so I'll split this into several shorter posts.

What is Family Tax Benefit?

There is probably more confusion surrounding FTB than any other payment. Family Tax Benefit has two parts; Part A and Part B. You may be eligible for either one of Part A, Part B or both.

Part A is designed to help with the cost of raising kids and is paid for each dependent child you care for who is aged under 21 (or 21-25 years and still studying full-time).

Part B is designed to provide extra support to families with one main income earner, including sole parent families. Part B is a family payment and can be paid until the youngest child is 16 years (this can be extended to 18 years if the child remains in full-time study and does not receive a social security payment of their own).

Future posts will look at both Parts A and B and answer the questions of who qualifies, how to claim and how much it will be.