How tax help work out – the first thing you want to figure out
Are you planning to use a grant to pay for your taxes? If yes, what do you need to do? If you need to file the application forms online, it may not be possible if you are using a computer with low internet speed. Do not panic, as the application forms can be downloaded in PDF form. The next thing is to fill in the application forms. Before filling the form, the following is necessary;
What are your taxable income?
What are your eligible expenses?
What is the total amount you are expected to pay in income tax in any financial year?
How many children do you have?
Fill in your income tax return if you have paid the amount in the last six financial years. If you cannot answer some of the questions or are not clear about the questions, you can download a copy of the application form. If you are a single person and the following questions do not apply to you, your income tax return is called a “no income” form. The person who needs to fill in this form is called the filer.
What is a person’s taxable income?
If the person is not aware of their taxable income, they should visit the Department of Revenue. Taxable income is the income that is calculated after tax allowances. Taxable income is generally calculated as your:
Wages
Interest
Dividends
Gross rental income (rental property)
Any gift
Gross rental income (non-renal property)
What are the eligible expenses?
There are some expenses that are not considered as tax deductible in income tax purposes. For example, if the filer does not fill the application form in time, they have no choice but to give full tax allowance to the person they are paying their taxes to. Therefore, fill in the application form as accurately as possible.
What do I do if I have no taxable income?
A person who has no taxable income is called a person “living on investments.” They can claim an income tax credit instead of paying income tax. The person can claim this income tax credit by filling the form “Live on Investments”. To claim this income tax credit, the person must have the income from the following:
Rental income (non-gift)
Income from a business or investment company (where the main asset is investment property and the company is paying tax to the filer)
The filer can claim a certain amount of this tax credit each year. The amount of the credit is calculated by:
(amount of income from rental property or investment company) x 0.4
(If the filer is not a company, their taxable income is the amount after deducting all eligible expenses)
The amount of credit is capped at $40,000 per person per year.
If the business or investment company does not pay any tax, then the credit is reduced to the full amount of credit as long as it is a valid claim.
How much can I claim?
The credit varies with income. Tax payers of low and moderate income (for tax year 2012-13) can claim a credit of up to $3,000 each year. Tax payers with a family income of over $150,000 can claim up to $6,000. This maximum amount can be reduced or removed if certain conditions are met. These conditions can be found here.
However, if the income is negative, the maximum amount that can be claimed is $40,000.
A person cannot claim more than one of these credits on their tax return.
How to apply for an income tax credit?
The income tax credit can be claimed through income tax returns.
To apply for an income tax credit, taxpayers file a self-assessment tax return for a particular year. In the summary box on the tax return, enter the information needed to claim the income tax credit. After filling in all of the information, taxpayers must return the completed tax return to the ATO.
If you are unsure if you can claim an income tax credit, you can check your refund to see if your return was assessed. If you believe that you do not qualify for the credit, you should contact a lawyer or ATO staff member.
Can I claim an income tax credit for a partner?
Income tax credits are available for families, not just individuals. If you and your spouse are part of a small business and are in a partnership, you can claim the income tax credit.
For more details about how tax help makes a significant change for a better financial life, call (888)489-4889 for a free consultation today!