Income
What is a Living Away From Home Allowance?
A living Away From Home allowance is paid by employers when they require an employee to work in an area that is different to their normal workplace and the employer pays the costs to the employee for living away from home.
For example, I work and live in Melbourne and after a few months the company requires me to go to Regional NSW for a few months to do some work there. They pay me an allowance for the costs of living in regional NSW because they have requested me to work there for a time. I do not need to declare it in a tax return. It is an allowance paid by an employer to an employee and is not subject to tax by the employee, provided it is paid in accordance with the tax office guidelines. No expenses can be claimed against this allowance.
I won $150,000 on a game show this year, is this taxable income?
If you are a professional contestant it will be taxable. If someone appears as a regular contestant in these shows then they would be considered to be a professional. If your prize was from a one-off appearance then it wouldn't be taxable.
I have received $25,000 for an interview on a current affair show. Is this taxable?
Yes this payment is taxable. You have been paid for providing a service.
I have inherited some money. Is it taxable?
The inheritance is not taxable unless advised by the executor that part is taxable. However, if you invest the income from the estate then any earnings will be taxable.
A friend told me about an investment that he was interested in and suggested that I put some money into it as well. He says we could make a large amount of money but I think it sounds too good to be true.
You are wise to be cautious. Not all schemes are genuine and often promise large tax deductions that they say will be allowed by the tax office. It is wise to check out investment schemes before you put money into them. If you invest in a risky tax scheme you could lose some or all of your money and you may have to pay back any missing tax with interest and penalties. Before you invest in any tax scheme it is advisable to seek independent advice from a professional advisor and/or the tax office. Information and warnings about investment schemes and scams can be found on the Australian Securities and Investment Commission and the Australian Competition and Consumer Commission SCAMwatch website.
Can all the interest from our joint accounts be declared in my wife’s tax return because her income is much lower than mine?
All income must be declared by each recipient on the same basis as the accounts are held. You cannot declare it all on your wife’s tax return.
My bank interest is only $10. Does this amount have to be declared?
You must declare all interest from all sources no matter how small the amount is.
My 14 year old daughter has received $600 from a trust distribution. Does she have to lodge a tax return?
If this is her only income she does not have to lodge a return. During the 2011 income year a minor may have earned up to $3,333 from investments before any tax would be payable on that income. However, from 01 July 2011 the Government will be removing the ability of minors to access the low income rebate for unearned income (such as interest, dividends, rent, royalties etc). Personal services income (like salary & wages) will still have the tax payable on it reduced by the low income rebate but all unearned income will not attract the low income rebate and simply be taxed at minors’ rates.
I have shares and received franked dividends this year but have no other income. Do I have to lodge a tax return to get the franking credit refunded to me?
You do not have to lodge a full tax return. You can complete the Refund of Franking Credits for Individuals form which can be lodged by telephone or mailed to the ATO.
I have just received a letter from the tax office saying that I did not declare some interest from my bank account. What should I do?
Contact your bank to verify the income details for your accounts if you believe that this is incorrect. The bank should notify the tax office in writing if this information is not correct. You have 28 days to correct this information. However, if you have omitted the income you will not need to contact the ATO. They will amend your return and send you a new assessment requesting payment of the additional tax, a general interest charge and, in some cases, penalties.
Do I need to declare my overseas pension?
In most cases overseas pensions are taxable and if you are an Australian resident you will need to include the amount in your tax return. There are a few exceptions to this rule. Please call H&R Block if you are not sure.
Do I have to declare income from Centrelink (Newstart, Austudy) on my tax return?
It must be declared. This is because the tax office needs to determine what tax rate applies to your other earnings for the year. At the end of the financial year you will receive a payment summary from Centrelink indicating how much must be included in your tax return (taxable amount). You may be entitled to a rebate to ensure that no tax is payable on your benefit.
I have just moved permanently to Australia. Do I have to pay tax on the money that I have brought with me?
You will only have to pay tax on any earnings that you make from the time that you moved to Australia. If the money that you brought with you earns interest in a bank account you will have to pay tax on the interest.
I will be going to Europe for six months and intend to work while I am away. Will I have to pay tax in Australia on the money that I earn overseas?
The income will be taxable unless you have worked overseas continuously for more than 90 days and are working on a specific Australian government project or deployed overseas as a member of an Australian government agency. In these cases the income will be tax exempt.
If your overseas income is not exempt, you will need to declare the income on your Australian tax return and may be entitled to a foreign income tax offset for any foreign tax that you paid on that income.
