23 Sep 2007, Comments Off on Liveblogging my tax return

Liveblogging my tax return

Author: Helen

1:25 PM: I always have problems with the question on page 1: Will you need to lodge an Australian tax return in the future?

Jeez, I dunno. I always tick Yes, because I intend to be still alive and compos mentis and employed next year. But who knows if they’ll be around to lodge an Australian tax return the following year? Life is precarious. What if I’m knocked off my bike (that’s assuming I get on it enough to be knocked off it) under the wheels of one of the B-doubles that our new local MP won’t be banning from our local roads? What if I have a massive great haemorrhage or an unfortunate car accident and I’m in a persistent vegetative state?

Unfortunately, the only options are binary, or rather, quadrinary. Yes, no, don’t know, and last return. There is no text option for long philosophical discussions.

Onward.

2:00: Do you think I’m being too anal putting $460 in the Supplementary section against Personal Services income (PSI) for occasional services rendered to Tess Mckenna at the Brunswick Green?

2:18: 20% Tax offset on net medical expenses over the threshold amount

You’d think they’d find it in their hearts to put in brackets what the threshold amount actually is.

Murphy’s law says I’ve managed to lose the booklet for the supplementary section. A search on the ATO website for “medical expenses threshold” comes up No pages match your criteria.

4:15: Abandon the Deductions for now. I’ve done everything else on the Tax return, now for middle-class welfare family tax benefit.

Spouse details:
Spouse number 1

Dear God, how many am I supposed to have? Surely one’s enough.

The garden needs a water. This is NO WAY an attempt to procrastinate.

Tomorrow for sure.

Comments (0)

  • kate says:

    I get stuck on ‘are you an Australian resident for tax purposes?’, because I really don’t stay here for the cushy deal I’ve got going with the ATO.

    So I send it all to the accountant, because he is made of sterner stuff, and also because he gave me a stubby holder with his work address on it.

  • JM says:

    “Will you need to lodge an Australian tax return in the future?”

    This question actually makes more sense than you might realize, as it applies to people who have gone overseas.

    Let’s say you moved overseas on 1 June and are lodging your return (say) 2 July (just ‘cos you’re super-organized).

    If you now have no Australian income or investments you no longer need to lodge tax returns in the future and this is your last return.

    On the other hand let’s say you’re flying out on the evening of 2 July but got your last paycheck on 1 July. Then you do have to lodge another tax return (next year), only covering that paycheck.

    All of the above also applies if you’re a tax accountant completing a form for a client who died during the year.

    [Now there’s also a wrinkle if you are going overseas and still have Australian income or investments – say because you’re renting out your house. That’s nearly the same issue and there is a question later about that as well, but it doesn’t make a big difference to the overall issue. That’s the ‘are you an Australian resident for tax purposes?’ question. This one is too subtle to go into.]

    Now why is this important? I hear you ask. Glad you asked.

    Because the ATO taxes Australians on world-wide income, and if you are silly enough not to answer these questions they’ll tax you on income you earn overseas. For income in many countries this doesn’t make a lot of difference.

    But it makes a huge difference if you are moving to Europe (or the UK). Normally, what would happen is that the ATO gives you a credit for tax paid in those countries, so:-

    Overseas income: $100
    Tax paid overseas: $30 (say)
    Tax due in Oz: $30
    Credit $30
    To pay $0

    BUT – in Europe and the UK a lot of “tax” is not really tax, but is social security “insurance” and (here’s the important bit) _you_ _don’t_ _get_ _credit_ for insurance payments, so the above calculation becomes (for the UK):

    Overseas income: $100
    Tax paid overseas: $20
    National Insurance $15
    Tax due in Oz: $30
    Credit $20 (*not* 35)
    To pay to ATO $15

    In other words you pay the same $15 twice, once to the UK government, and then again to the ATO. As far as the ATO are concerned “tough”

    Which is why if this is your last return in Australia, you answer “Y” to this question.

    This tends to bite backpackers on working holidays particularly badly, but can easily affect a lot of other people.

    Warning: I am neither an accountant nor a lawyer.

  • Helen says:

    Thanks for that detailed response JM and sorry you languished so long in moderation.)

    Sadly I am not going to have the opportunity to test this, at least in this decade, but if I do go to live O/S in the future then I’ll know.

  • Ann O'Dyne says:

    Irw Stevwin ticked ‘Yes!’ without thinking.
    so did P.Brock.

    My favourite government instruction is when Centrelink, not generally dealing with those who have cash, says “You must tell us if you go overseas!”

    yeah right.

    i’ll send a card from Deauville.

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