We complain constantly about the amount of tax we pay but we do not always focus on appropriate tax planning and consequently miss out on tax entitlements. These entitlements may take the form of deductions, rebates or tax benefits. A consultation with your taxation adviser or financial planner might clarify these entitlements by determining your eligibility.
In this space I cannot cover all of the deductions, rebates and tax benefits so I will limit discussion to Super Contributions and the Family Tax Benefit A and B.
If you are an eligible tax payer (eg self-employed person not receiving any employment income) then you may be able to claim a tax deduction for personal contributions made into an approved superannuation fund. There is a cap on these concessional contributions of $25K (including all employer super contributions).
Depending on your income you may be able to apply for the Government co Contribution where the government will match 100% of your personal after-tax super contribution, up to a maximum of $1000.There is a proposal to reduce this matching co-contribution to $500 for up to $1,000 made as after tax contribution,but this has not yet been legislated. Co-contributions will provide an immediate benefit to your superannuation balance Before earnings.
If your spouse is a low income earner (less than $13,800) you can make a spouse super after-tax contribution of up to $3000 and attract a personal tax rebate of up to $540 per year.
Family Tax Benefit
The Family Tax Benefit is cash payment made to parents and in some cases carers of children under the age of 20 and dependent students under the age of 24. It is provided to assist in the care of children and eligibility and payment amounts are related to total family incomes and the number of children in the family.
Family Tax benefit Part A
If your family’s adjusted taxable income is less than $47,815 you may be eligible for the full payment. Incomes over this level will see you receiving a reduced payment of 20 cents for each dollar over the base rate. The income cut out level is $94,316 (plus $3796 for each Family Tax Benefit child after the first)
Payment rates range from $169.68 per fortnight for children aged 0-12 and $220.64 per fortnight for those aged 13-19.
Family Tax Benefit Part B
This benefit again is a cash payment where the primary earner has an assessable income of less than $150,000 and the secondary earner has an income less than $25,623 (youngest child under 5) or $19,929 (youngest child 5-18)
In addition if you are a recipient of Family Tax Benefit A you may be entitled to the Education Tax Refund (2011 tax year only) where you \can claim 50% of eligible educational expenses. Maximums apply depending on whether you child is in primary or secondary school.
In conclusion there may be entitlements that you are missing out on through a lack of knowledge, confusion or the complexity of forms and applications. Seek out a Financial planner who will assist you in maximising your entitlements, the benefits are all yours