Tax Returns For People with their own ABN

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Usually a sore subject, some companies you work for will ask you get your own Australian Business Number (ABN), they’ll pay you an amount and it’s up to you to sort your own tax out. This is in most cases we see is not the right way for things to be done and is simply done because the employer is too lazy to sort out the tax themselves.  One of the first questions the ABN application asks you is “do you run your own business” if the answer is no (most commonly the case) then your not allowed your own ABN.

But we get a lot of people who had no choice but to get an ABN and get paid in this way. So at the end of the Australia tax year they have to declare all the earnings and sort out all the tax.

So what happens to this earnings? Basically your tax return get the money you earn under your own ABN get treated the same as the money you were paid though pay as you go (PAYG). And the tax you’ll have to pay on this money is at the same rate….this ultimately means that if you earn under $12 in total (PAYG+ABN earnings) then you’ll still have no tax liability & still therefore usually achieve a full tax refund. If you earned over the tax free threshold then your either going to not get all your taxback or even have to pay some tax as a result of your Australian tax return.

When you work with your own ABN you should sort your tax out every quarter by lodging a BAS return. Most people don’t do this and sort it out at the end of the finacial year…then they’ll get BAS request each quarter after this. Our advice is for people to cancel their ABN’s as soon as they will no longer be earning money under it- if you don’t then you’ll have to lodge a zero BAS return each quarter.

Our biggest tip is to stay organised and keep:

  • Invoices
  • Receipts for the things you had to buy for work
  • Your ABN handy
  • The address your ABN is registered at
  • The ABN’s of the companies who invoiced you

If you have any questions about tax returns fee free to contact us.

Amended Returns

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We get a lot of people who tried doing their own tax return here in Australia and got it wrong…these people often end up getting a very small tax refund or owing money to the tax office.

If this sounds familiar get in touch with us as we could well put it right for you and help you to get a big tax refund. We out it right by creating a tax return which is the same as the one you submitted then we make the necessary changes, note them down and send the new return off to the tax office.

So for us to be able to fix the mistakes you made we’ll need to be able to re-create the original return…so remember what information you put in your original tax return! If you can’t remember what you put in their we can order a copy of the return for you.

Amended tax returns usually take 4-8 weeks for the tax refunds to come back.

 

Get the biggest Tax Refund Possible!

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Most people are only interested in tax when they realise they can get a tax refund here in Australia!

So I thought it might be handy to give some tips on ensuring you get the biggest tax refund possible…

The number one thing to remember is that you have to be classified as a resident for tax purposes to be eligible to receive a handsome amount of taxback. If you cannot be classified as a resident for tax purposes then you are likely to get a small Australian tax refund or even owe the Australian tax office money. It is a legal requirement to lodge a tax return here in Australia if you have earned money and paid tax on it and not everyone will achieve a refund from their tax return. The issue of tax residency is covered in other posts so have a dig and read around the subject there…

The next thing is…will you be getting all your taxback without doing anything other than declaring your gross earnings and the tax you’ve paid?

Usually people who’ve earned under $12 per year will get all their tax refunded to them after lodging a tax return in Australia. So if this is you stop worrying and just apply for your tax refund with us now! You just can’t get more taxback than you paid in the first place (not everybody believes us when we tell them this!)

If you’ve earned over 12K or havn’t been here a full year then you may not be due all your tax back. So it’s time to use deductions, offsets and possibly a zonal allowance to help you get more tax-back.

Tax Deductions:

Basically most of the stuff you spend on stuff for work can be used as a deduction, these reduce your taxable income and so you have to pay less tax (which means a higher tax refund). If your deductions are below $300 in total (as at 2011 financial year) then you don’t need receipts. If your total deductions are above $300 you’ll need copies of your receipts for us.

The most common deductions we see:

  1. Travel- You can claim for travel from one place of work to another, but not from home to work and back. So keep log books or fuel recepts only if you travel around allot for work…but don’t bother if you just go to one place of work and back home again.i
  2. Uniform- You can use the cost of uniforms as deductions, but they need to be specific to the place you are working at, it needs to have your name or the company name/logo on it…you can’t just say I bought this suit as I was a car salesman.
  3. Courses- If the course you took was related to your job (such as a barista course and you worked in a coffee shop) then you can use this cost to help you gain a bigger tax refund.

 So do I get the full amount of my deductions back?

Short answer is unfortunately no! As mentioned above tax deductions reduce your taxable income and so reduce the amount of tax you have to pay. What you save is the marginal rate of tax- that is to say the amount of tax you would have paid on the earning which the deductions account for. So if you deduct $300 and you were paying 15% tax on your earning you’ll get an extra $45 from your tax return because of your deductions.

 Zonal offset, WTF is that then?

A zonal offset is a tax offset which the Australian taxation office allows you on your earnings when you work in a remote location for a period of at least 6 months. We often come across people who have either worked in a remote location for a shorter time than 6 months and it doesn’t count for anything I’m afraid. We also see people who’ve worked places which they think are remote…but are far from it (Outer Sydney is not a remote loaction, even if you don’t get mobile phone reception!). There is a set list of areas classified as remote zones which we look up for you. A good place to start is the postcode of the place you worked in…In Australia the postcode starts at X000 in the center of the states capital and the number grows as the area moves away from it. So if you have a large number for a postcode there may be a chance of using a remote location offset to help you get a bigger tax refund.

 Dependant Spouse Offset

If you have a spouse who earned very little and was dependant upon you then we may ask you for more details as this could get you more taxback.

Medical Expensis 

If you spent over $2000 on medical expenses and aren’t due all your taxback give us the receipts and you can get 20% of excess back.

 

 

Backpackers Part Year Tax Returns

Posted by & filed under Musings.

There is often confusion as to when people can claim their tax back part way through the year and what’s needed to be able to get this taxback.

The answer is pretty straightforward, you lodge a normal return at the end of June each year, them when you have finished working in Australia for the financial year you can lodge a return to get back the tax you paid after July.

So as soon as you recieve your final pay slip you are ready to apply for your Australian taxback with us.

These part year returns are just the ticket for getting your Australian tax refund when you most need it and with our same day tax refund you can even have it in your bank the very next day, ready to use on flights or holidays.

So remember you are ready for tax-back as soon as you will no longer be working in Australia

 

What you need to get an Australian Tax Refund…

Posted by & filed under Musings.

To get a tax refund we need to be able to lodge your Australian tax return for you. To do this we’ll need to know your total gross earned and the total tax paid within the financial year (June- July) for each of your employers.

We get these figures from your final payslips or a pay summary (also know as a PAYG or Group Certificate). If you have these documents allready, great! If you do not have them don’t fear all is not lost. We are able to talk to the Australian tax office and see if they have your pay figures. If they don’t have the figures we are able to call your old employers (hopefully not all farmers keeping their records on the back of envelopes) and request them to send the figures to us.

You’ll also need to know what your tax file number is, if you havn’t got a clue what this is you can call one of your old employers or the tax office to get it.

And ofcourse you’ll need to know the details of your bank account where you want the tax refund to be sent to! But you can apply now and give us the bank details later no worries.

So in summary to get your Aussie tax back you’ll need:

  1. Final Payslips (aka: pay summaries, PAYGs, Group Certificates)
  2. Know what your tax file number (TFN) is
  3. Fill out our applicaiton

LAFHA Reform

Posted by & filed under Musings.

All change in LAFHA

As from 1st July next year the government will be reforming the Living Away From Home Allowance. Canberra have reported the cost of LAFHA to the Australian taxpayer increasing from 162 million in 2004-05 to $740 million in 2010-11.

Whats gonna change?

• Access to the tax exemption for temporary residents will be limited to those who maintain a residence for their own use in Australia, which they are living away from for work purposes, such as ‘fly-in fly-out’ workers; and

• Individuals will be required to substantiate their actual expenditure on accommodation and food beyond a statutory amount.

No permanent resident legitimately using this tax exemption for accommodation and food expenses will lose any entitlements.

These changes will ensure that a level playing field exists between temporary residents and permanent residents, and that Australian taxpayers are not funding the unfair exploitation of concessions.

So if your a temporary visa holder and your on LAFHA make the most of it until July 1st.

More info here

 

The falling Aussie dollar=boost for international tourism?

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As the Aussie dollar falls below 95c for the first time in over 6 months the relative cost of coming to Oz is dropping for people oversees…but how do we make use of this tourism and additional skilled workforce?

At this week’s tax forum in Canberra Trade Minister Craig Emerson called for a “third phase” of economic reform to boost national productivity. These reforms could come in the form of tax concessions and a change in the depreciation regime for hostels…this would write off hostels quicker than the current period of 25 years.

More of the story here: http://www.smh.com.au/business/steel-tourism-sectors-push-for-tax-breaks-at-forum-20111002-1l3t1.html

Buddy wins case against the Australian Tax Office

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Backpackers Buddy has won a case it lodged for client Matthew Groves against the Australian Taxation Office. The favourable ruling enables all backpackers who have lodged a tax return in the last two years to resubmit the paper work to seek amendments that will increase their refund amount.

In 2010, Groves, a British backpacker and a Backpackers Buddy tax client, was denied a tax refund by the ATO, who ruled that he was not a resident for tax purposes.

Backpackers Buddy successfully challenged the ATO’s ruling in an Administrative Appeals Tribunal on Thursday 25 August 2011. The Tribunal has said the ATO was mistaken and instructed the nation’s tax body to amend the assessment, resulting in Groves being eligible for a tax refund.

The win means Groves will go from owing $180 to receiving his full Australian tax refund of $1742 plus interest for the time the ATO has had the money.

“This is a great result”, says David Goldsmith of Backpackers Buddy, “we are always fighting for the best outcome for our clients. We want clarity for Backpackers in Australia who often do not understand their tax position whilst working which leads to complications when lodging their tax returns.”

Since the ATO must amend its assessment of Groves, it may also have to amend other assessments. If you are or were a backpacker in Australia and have lodged a tax return in the last two years you can resubmit it to seek amendments to increase the return amount. If you are unsure, Backpackers Buddy has knowledgeable staff able to advise you on your previous refunds. Phone 1300 551 412.

Groves is now back at his home in England.

Cairns

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Cairns to me feels like a giant shopping mall…very comfortable and whilst it has everything you need, you wouldn’t want to stay there longer than needed.
Cairns is a very popular Backpackers destination and it shows! There are over 40 Hostels in the city, I stayed at Calypso (some people know it as Zanzibar (which is the bar here). The room was probably the best I’d had on my way up the coast. The bar is good and the food offers are even better! You have the choice to relax or party here. The hostel is a little out of town (they run free buses throughout the day). If you want to get into the thick of it and party your butt off stay at either Shenannigan’s (with the Shag Bar) or Gilligan’s Backpackers, both hostels are huge and smart and they both go off!
Most people base themselves in Cairns to dive the barrier reef or to head into the rain forest just north. The city has a great night life but rather limited appeal otherwise. The main CBD has a manmade lagoon complete with statue fish and grass which people don’t seem to feel stupid sun baking on! I would plan to stay here only for the duration of the trips booked then keep moving north to the awesome Cape Tribulation.

Stay – Relax at Calypso Inn (07) 4031 0910 party at Gilligan’s Backpackers (07) 4041 6566

Do – Get to the Great Barrier Reef for some diving action.