Rudd to offer generous concessions to bank accounts for savers

MUM and dad investors will receive generous concessions to park their savings with banks and building societies as part of sweeping tax reforms.

The Rudd Government is preparing to unveil a new savings scheme offering tax breaks similar to superannuation’s discount rate of 15 per cent, The Daily Telegraph reports.

It will encourage investors to deposit savings with the four major banks and other respected financial institutions.

But investors will have to “lock up” their savings — perhaps for between five and 10 years — to qualify for the special rate.

The new savings deal will be announced as part of the Government’s much-anticipated response to the Henry tax review.

It will be part of a suite of measures aimed at building a new savings culture in Australia.

But it is also hoped it will generate billions of dollars in bank deposits, cutting the need for finance houses to borrow from overseas.

The Government expects it will be popular with voters who currently face punishing tax rates on savings. Some taxpayers can pay up to 50 per cent on interest earned from their bank deposits.

Australia is one of the few countries in the world to tax bank savings at the full rate.

Among key reforms, taxpayers will be able to lodge their annual tax returns with a few clicks of a mouse.

And Australia’s antiquated tax system — containing 125 different taxes — will be streamlined to simplify arrangements.

It is understood the Reserve Bank and other financial authorities have raised concerns about the steady decline in deposits.

Bank CEOs have been lobbying Canberra for changes to taxation on ordinary bank deposits, claiming the superannuation industry gets a huge advantage.

And they have a strong ally in Treasury boss Dr Ken Henry, who has also raised concerns over the punitive rates faced by those who save with banks.

Source  :  www.news.com.au

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How to avoid an end of financial year tax headache

• Last-minute tips to save on tax
• What to claim, how to file
• Plenty of help on ATO website

HAPPY New Year! Well, almost. With only 24 hours left until the end of financial year, what should you be doing today to ensure that you don’t end up with a big tax hangover tomorrow?

“Don’t forget to pay your expenses,” says Tracey Nicholson, the Assistant Commissioner of Taxation.

“Ensuring that expenses are paid and claimed in the correct tax year can save a lot of headaches in having tax returns amended down the track.”

Ms Nicholson suggests that some top-priority things for taxpayers to do prior to lodging their return include:

• Go surfing! The ATO website, that is.

“There is a wealth of information on the ATO website, both general as well as information that’s specific to various professions,” says Ms Nicholson. “It’s a great place to start your research on what you may be able to claim as a deduction.”

• Spring clean the house to find your receipts.

“At the end of the day you need to keep your receipts to substantiate your claims,” says Ms Nicholson.

• Lodge online.

If you are DIYing your tax, Ms Nicholson recommends the online e-tax process as a great way to complete your return.

“It’s free, and has a great step-by-step process that will help remind you of anything that you have forgotten,” she says.

It can be worth getting professional advice as well though. Bill Keays, founding director of WA-based Hales Keays Chartered Accountants says that in his experience there are a number of tax-related benefits that people sometimes overlook.

“Motor vehicle expenses are often overlooked,” he says.

“You can claim up to 5000 kilometres of work-related use based on a reasonable estimate of business kilometers, without needing to keep a log book. But some people think that if they haven’t kept a log book, they can’t claim.”

Another forgotten area, according to Mr Keays, is depreciation on a rental property.

“Sometimes clients are not aware of how much depreciation they can claim,” he says.

“For taxpayers who have a relatively modern rental property, engage a quantity surveyor to prepare a depreciation report. They will typically save you many times more than their fee due to the deductions they identify.”

But lest you get carried away with all the potential deductions out there, remember that you do need the paperwork to back it up.

“We conduct plenty of audits,”says Ms Nicholson.

“We’re going to have a special focus on truck drivers, sales and marketing managers, sales reps and electricians this year – but any taxpayer has the chance of being audited.”

And while it may be too late for this financial year, consider getting some professional advice for next year’s tax return because sometimes you don’t know what you don’t know.

“There’s usually always some way in which we can save clients extra money, either by identifying deductions or simply getting their tax structures right to start with,” says Mr Keays.

“The Small Business CGT concessions are a great example.

“One of my clients was expecting to pay capital gains tax of approximately $240,000 when he disposed of his business and he ended up paying nothing by applying these concessions.”

Your tax time checklist                                                                                                                                                                                           

To help you get the best tax return possible, here’s a few things to tick off your “to do” list today:

1. Are you eligible for the Superannuation Co-contribution? If so, it’s up to $1,500 of free money.

2. If you use your car for work, don’t forget to estimate your motor vehicle expenses.

3. A 20% tax offset is available for out of pocket medical expenses over $1500.

4. Donations of over $2 made to a deductible gift recipient are tax deductible.

5. The cost of having your tax return prepared is also an allowable deduction.

6. Income Protection insurance premiums can also be a tax deduction.

7. Small business owners who are selling business assets can take advantage of extremely generous “small business CGT concessions.”

8. You can claim up to $300 of work related expenses without the need to have written receipts. However once your claim exceeds $300 you must have receipts for the full amount.

9. Don’t forget all those miscellaneous work expenses such as union fees, seminars, trade journals, software and home office expenses. Even an appointment diary can be deductible.

10. Check the deductions fact sheet for your specific occupation to ensure that you are claiming everything that you are entitled to.

Source  :   www.news.com.au

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2009 Tax time is here

The Tax Office today reminded Australia’s 11.8 million taxpayers to start getting ready to lodge their tax returns.                                                                                                

Tax Commissioner Michael D’Ascenzo said the Tax Office has a range of information and assistance available to help people meet the 31 October 2009 deadline.

“From 1 July, people can prepare and lodge their return online using e-tax, which is free, secure and easy to use software which in most cases processes your return within 14 days.

“As well as calculators, help screens and links to rulings, you can also download information from third parties directly into your tax return, including payment summaries, government payments such as pensions and allowances, bank interest and private health insurance details.

“E-tax can be accessed free of charge 24 hours a day, seven days a week from our website at www.ato.gov.au,” Mr D’Ascenzo said.

Government and third party information will be available to download progressively from 1 July. You can subscribe to an alert service within e-tax which will let you know when the information becomes available.                                                                                                                                                                                        

People can still lodge using TaxPack 2009 or the short tax return for individuals 2009.

TaxPack 2009 is available from most newsagents, Tax Office shopfronts or the Tax Office website from 1 July.

If you used the short tax return last year you’ll receive a copy in the mail shortly.

Mr D’Ascenzo also reminded people to contact their tax agent as soon as possible.

“If you’re using a tax agent for the first time or using a different one from last year you need to contact them by 31 October 2009,” he said.

“Only registered tax agents can charge a fee to prepare and lodge a tax return.

“However some people present themselves as tax agents when they are not.

“Registered tax agents are regulated by the Tax Agents’ Board and have the qualifications and experience to handle your tax affairs.”

Visit the Tax Agents’ Board website http://www.tabd.gov.au or call 1300 362 829 to check if your agent is registered.

Compliance focus

We cross-check tax returns against a wide range of data including financial institution data, state and territory revenue and property sales information and Australian stock exchange data.

Help and assistance

If people have questions or need assistance they should visit the Tax Office website www.ato.gov.au or phone the Tax Office on 13 28 61 between 8.00am and 6.00pm weekdays.

The Tax Office can provide you a more personalised service if you provide your tax file number when you call.

source  :  www.ato.gov.au

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Budget ‘could spark multiple birth spike’

Fertility doctors are worried they will be under pressure to implant multiple embryos into women who cannot afford ongoing treatment due to new financial safety net caps, a leading IVF specialist says

Having two embryos implanted into the uterus instead of one raises a woman’s chance of having a multiple birth, says IVF Australia chairman Professor Michael Chapman.

As part of Medicare Safety Net restrictions unveiled in Tuesday’s budget, payments for IVF will be capped at different rates for each stage of treatment once a person reaches the safety net threshold for out-of-pocket medical expenses, which is $1,111.60, or $555.70 for those on low incomes.
This could hit women with an extra $1,500 to $2,000 of out-of-pocket costs per IVF cycle.

There are also caps on safety net payments in other areas including obstetrics, varicose vein and cataract surgery.                                                       

Under the changes, pregnant women who choose to see a private obstetrician will be out of pocket by $550 unless doctors lower their fees.

“That is why the government is urging women to question their doctors about their fees,” Health Minister Nicola Roxon said.

An average of $4.5 million of taxpayers’ money is paid to the top 10 per cent of IVF specialists each year.

But Prof Chapman said the government, which says it wants to crack down on specialists who charge exorbitant fees, was using the figures for political gain.

“For every doctor that gets money, there are 10 staff members, the scientists, counsellors and nurses, they get funded through the rebate,” he told AAP.

Prof Chapman said he accepted there had been a 40 per cent rise in IVF fees over the past five years but said that it was in line with general medical inflation.

Current Medicare rebates, which work out to about $4,200 per child, go towards employing about 2,000 people in private IVF clinics nationally and investing in research and facilities, Prof Chapman said.

He estimated out-of-pocket costs for patients would rise from $1,600 to between $3,000 and $3,500 when the safety net caps come into effect on July 1, 2010.

It can often take more than one IVF cycle for a woman to fall pregnant.

“Certainly, patients are going to be more out of pocket for IVF than they have been in the past,” Prof Chapman said.

He warned doctors would be under pressure to implant more than one embryo per cycle into women as a result of safety net restrictions, increasing the chance of multiple births.

“Over the last five years in Australia the twin rate has dropped dramatically because we have been able to put one embryo back,” he said.

“But if patients think they won’t be able to afford the next cycle they will put a lot of pressure on the doctor to put two embryos back.”

Ms Roxon said her department would work with medical professionals to restructure the system to better reflect stages in a treatment cycle.
www.sbs.com.au

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