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Employees & Self-employed persons can claim car parking provided the expense was incurred in the course of producing assessable income.
Employees who use their car for work related purposes are allowed to claim the cost of travel and car parking. A deduction for car parking is denied when the car is parked for more than 4 hours between 7am and 7 pm at or near the employee’s principal place of employment. This rule does not apply to employees using a disabled car sticker. If the taxpayer is provided with a company car, parking can be claimed provided the above rules are satisfied.
It should be noted that employees who start their shirt after 7 pm and drive to work, cannot claim parking expenses simply because they are parked at or near the workplace outside the period mentioned above. They must still be using their car for work related purposes during their shift to be able to claim the cost of parking at or near their workplace. However, the 4 hour limit is not relevant for the time period.
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A special tax offset is available to certain taxpayers who reside for more than half of the income year (183 days) or who actually spend more than half of the income year (183 days) in specified remote area of Australia. This is due to the factors of isolation, uncongenial climate and the high cost of living.
A zone tax offset must be reduced by any amount received as a remote are allowance from centre link or the department of veteran affairs. Although these amounts appear on the earnings statement or payment summary, it is not assessable income.
Australia is divided into four areas: Unzoned, Zone A, Zone B and the special Zone areas
Zone A includes Macquarie Island, Norfolk Island, Cocos Islands, Christmas Island, Lord Howe Island, Heard and MacDonald Islands and the Australian Antarctic Territory.
Zone B includes island forming part of Australia, which are adjacent to that part of the coastline of the mainland and Tasmania.
Special Zone is a place which is more than 250 Kilometers from the nearest centre of the population of 2,500 people or more.
Superannuation income stream is paid to self funded retirees. Any assessable superannuation income stream (pension) received is reported on a PAYG payment summary. However, for taxpayers who are aged 60 years or ago, no payment summary will be issued where only income from a full taxed fund is received. Under the rules that came into effect on 1st July 2007 taxpayers who are aged 30 years or more will only receive a PAYG payment summary if their superannuation income stream includes an untaxed element which will need to be declared on their tax return.
Component of an income stream are:
• Amounts accrued in the current year
• Offset amount calculated by the fund to limit tax payable
• Amount accrued in prior income year
The tax offset amount on the payment summary is calculated to reflect the age of the recipient and the source of the funds. This amount is calculated by the payer and should be recorded on the tax return.
As a Tax Agent Cranbourne we receive queries about the franked and unfranked dividends, this article will help you understand how dividends work.
Dividends paid by companies can be franked, unfranked or partly franked. A dividend is the taxpayer’s share of the company profit according to the number of shares they own.
Unfranked Dividend – Share of the profit before company tax has been paid.
Franked Dividend – Share of the company profit after the company tax has been paid.
Franking Credit – Company tax paid on the franked dividend. Taxpayers receive a franking offset for the amount of franking credit paid on the dividends.
Partly Franked Dividend – Part of the company tax has been paid on the dividend.
Share holders who receive dividends will receive a dividend statement from the paying company advising
• Date Dividend payable.
• The amount o the dividend that is franked.
• An amount known as the franking credit.
• The amount of the unfranked dividend.
• The amount of any TFN tax deducted.
• % rate of franking credit.
The amount of the franking credit is not received as cash by the taxpayer, but must be included in the taxpayer’s tax return because it is constructively received. In other words the franked amount is the taxpayer’s net income and the franking credit is the tax. Therefore the taxpayer has to declare both amounts.
Income received by way of rent from residential, commercial or industrial property is assessable income, with expenses incurred in gaining such income able to be claimed as deductions
• Date of signing contract to purchase property.
• Date property first became income producing.
• Number of weeks it was rented.
• If property purchased as joint tenants – income and deductions must be divided equally.
• If the property is purchased as tenants in common – the percentage of the income and deductions may vary according to their interest in the property as specified in the property title.
These details must also be kept with the taxpayers records.
Capital gains implications – In general, on disposal of the property, it will subject to capital gains tax for the period that it was rented out. There are however, a few exceptions to this rule.
Rental income is assessable when received.
It includes- advance rent, late rent and current rent received in the income year and insurance payments for loss of rent.
It excludes- rent due but not paid, rental bond (unless used for back rent or for expenses).
In the case of properties in the hands of real estate agents, they are acting as the owner’s agent and they receive income on the owner’s behalf. Income is declared from the agent’s statements from the July to June even through the rental periods may be in different financial years and the income may not be credited to the owner’s account until July of the following year.