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Disability Benefit Payments – How Are They Taxed?

Posted by Tax Advisor on 15 June, 2012

Everything you need to know about the different components of your disability benefit payments and how each is taxed

The taxes surrounding disability benefit payments can seem complicated, but once you break it down and look at the rules as they apply to each component it makes a lot more sense.

A disability benefit is a government payment you can receive if you suffer from a physical or mental illness that two doctors certify makes you incapable of gainful employment in a position for which you would otherwise be qualified.

The Department of Human Services handles disability benefits payments, so they cannot be claimed through the ATO. But come tax time, the ATO may require that you report and pay tax on a portion of your disability benefit payments. The question is, how much on which part?

Break it down

Your disability benefit payments will be divided into a tax-free component and a taxable component.

You don’t have to worry about the tax-free component – it’s not assessable and you don’t have to include it on your return.

But you do have to worry about the taxable component which may itself be divided into a taxed element and an untaxed element.

The taxed element has already had some tax paid on it, but depending on your age and you may need to pay more and include this amount on your return as assessable income.

The untaxed element hasn’t had any tax paid on it and you will definitely need to include this amount on your tax return as assessable income.

There are two different ways you can receive your disability benefit payments: either as a lump sum or as an income stream. How the different parts of your benefits are taxed depends in part on how you receive your payments.

If you receive your disability benefit as a lump sum

As stated above, you don’t have to pay anything on the tax-free component of your disability payment, which means that we are only concerned with the taxed element and untaxed element of the taxable component.

Here’s what happens to the taxed element depending on your age:

  • 60 and over – You do not owe tax on it
  • At or above preservation age and below 60 – You don’t owe any tax up to the low-rate cap amount of $165,000 for 2011-2012 or $175,000 for 2012-2013. Over the cap it’s taxed up to 15%.
  • Under preservation age – You will be taxed up to 20%.

Here’s what happens to the untaxed element by age

  • 60 and over – You will be taxed at 15% up to the untaxed plan cap of $1.205 million for 2011-2012 and $1.255 million for 2012-2013. Beyond that it is taxed at your top marginal rate.
  • At or above preservation age and below 60 – You will be taxed at 15% up to the low-rate cap amount of $165,000 for 2011-2012 and $175,000 for 2012-2013. Above this cap, you will be taxed at 30% until the untaxed plan cap amount of $1.205 million for 2011-2012 and $1.255 million for 2012-2013. Above this cap benefits are taxed at the top marginal rate.
  • Under preservation age – You will be taxed at 30% up to the untaxed plan cap amount of $1.205 million for 2011-2012 and $1.255 million for 2012-2013. Beyond this they are taxed at the top marginal rate.

If you receive your disability benefit as an income stream

Just as with a lump sum, you don’t have to pay anything on the tax-free component of your disability payment, which means that we are only concerned with the taxed element and untaxed element of the taxable component.

Here’s what happens to the taxed element, depending on your age.

  • 60 and over – No tax payable
  • Under 60 – You will be taxed at your marginal rate and you will get a tax offset amounting to 15% of your income stream’s taxable component.

Here’s what happens to the untaxed element, depending on your age:

  • 60 and over – You will be taxed at your marginal tax rate and you will receive a tax offset amounting to 10% of the untaxed element.
  • Under 60 – You will be taxed at your marginal rate. There is no tax offset for the untaxed element.

How will I know what to include on my tax return?

If all of your disability payment is tax-free, then you don’t have to worry about including any of it on your tax return.

If your disability payments include a taxable component, you should receive a payment summary that outlines the tax-free and taxable components of your benefit as well as whatever tax offsets you can claim. You must report all of the taxable component.

The ATO Annual Report for 2010-2011

Posted by Tax Advisor on 15 September, 2011

First and foremost we at TaxPack would like to congratulate all Australians on making it through another tax season. It’s always nice to breath a sigh of relief on November 1st knowing that you won’t have to deal with the ATO again until July of the next year.

We would like to thank everyone who lodged their taxes with us. It means a lot that you trusted TaxPack to take care of this unavoidable part of your financial life. And for those of you who didn’t lodge with us, we’d love you to consider TaxPack when the 2012 season rolls around.

For those of you already suffering from tax withdrawal, here’s a final end-of-season ATO fix. The agency recently released its Annual Report 2010-2011 to parliament on its website and you can check it out to see how they did for the financial year.

The annual report helps keep the ATO accountable to the Australian people and that’s a good thing. It also gives an idea of the direction the agency will be heading in the years to come.

The annual report is officially submitted by the Commissioner of Taxation, Michael D’Ascenzo to update parliament on ATO performance. But any member of the general public can access the document and assess the ATO for themselves.

Commisioner D’Ascenzo writes of the ATO’s mission:

We see our role as contributing to the development of a society which believes in and supports civic and legal responsibilities, which in turn underpins citizenship and the tenets of our democracy. Within this wider context we see our mission as being to nurture an environment that fosters high levels of proper participation in Australia’s tax and superannuation systems.

It’s refreshing that the ATO sees its responsibilities in such civic terms and has a vision of itself as more than a purely administrative agency, and I think most Australians would agree. It is a crucial link between citizens and the public goods and services that are essential to so many Australians. It’s rewarding to know the ATO takes its duties so seriously.

That being said, lodging taxes can still be a hassle, and the administration of any bureaucracy, especially one that deals with people’s money, is going to run into a few hurdles along the way. As such, self-assessment is an essential first step on the road to improvement.

Before addressing issues that require finetuning, the ATO identified several areas in which it performed well. Highlights for the 2010-2011 fiscal year included meeting a wide range of commitments to the government, including the “level playing field” initiative, new laws such as the flood levies, and commitments to the states and territories as mandated by the GST Administration Performance Agreement.

The ATO also improved performance against service standards, meeting 22 of 27 commitments to the community. This represents a significant improvement over the previous year.

In addition, the agency reunited 1.2 million Australians with their superannuation, provided up-to-date addresses for over 500,000 lost members, and contacted over 650,000 people with lost superannuation or money.

Still, despite the clear advances the ATO made over the 2010-2011 year it also has faced its share of challenges. Weak economic conditions, combined with the natural disasters early in the year, meant that many people had trouble meeting their tax or superannuation obligations.

2010-2011 also saw a rise in opportunistic non-compliance and attempts to cheat the tax system, the ATO reported.

Despite these obstacles, it was a busy year for the ATO. It collected a total of $273 billion, an almost $20 billion increase over the previous year and the first increase since the 2007-2008 fiscal year.

Also, as many of you may have noted, complaints were high early in the 2010-2011 year. The ATO brought them under control by meeting two service standards on a monthly basis by April 2011. By the end of June, complaints had returned to a normal level.

The report also focuses on the future of the agency. As of 30 June 2011, the ATO had 50 announced measures on its plate waiting for implementation. One of the agency’s major focuses for the next year will be its delivery of customer service, which is welcome given the issues of the last two years. It hopes to improve call handling, the processing of returns and payments, and the management of taxpayer accounts.

Given the uptick in evasion, it’s also not surprising that the ATO plans to work to improve compliance, with an increased focus on the fragility of the business tax system, tax fraud detection, offshore avoidance and tax evasion, the cash economy, employer obligations, especially with respect to superannuation guarantee charge requirements, and organized crime.

There’s plenty more included in the report and I encourage anyone interested in Australian tax policy and the ATO’s progress to check it out. Thanks again for lodging with ELodge.com and congratulations on another tax season successfully completed.

GST in Australia on the Tax Forum Agenda

Posted by Tax Advisor on 15 August, 2011

At a tax forum focused on simplification, the Australian GST is still not on the table

As Aussies keep their eye on the 31 October deadline for lodging income tax returns, there is an even closer and more exciting event–if there is such a thing in the world of taxes–on the not so distant tax horizon. On October 4 and 5, 230 participants and observers will gather in Canberra for the federal government’s tax forum. The goal here is to simplify the tax system, which while not the multi-headed Hydra that plagues countries like the U.S., is still considerably less efficient than it could be. This fact was driven home by all the hullabaloo surrounding the release of Ken Henry’s report last year and its oft-quoted and rather astounding statistic that 90% of Australian tax revenue comes from a mere 10 taxes out of 125 on the books. The other 10% comes from a confusing and inefficient jumble of the remaining 115 taxes. In the pre-summit debate about how best to go about streamlining the tax system, the issue of Australia’s tax rates, particularly the GST, has taken precedence over almost everything else.

What is the GST, you ask? The GST, which stands for Goods and Services Tax, is a value-added tax of 10% on most goods and services transactions in Australia. Like a sales tax, the consumer ultimately pays the tax, which is perceived by the buyer as a tax on the price. But unlike a sales tax, which is collected and remitted only once, after the final purchase, a value-added tax like the GST is collected and remitted to the government at every stage of production and distribution, with manufacturers and sellers credited for the taxes they’ve already paid on the inputs. In other words, they only pay for the value they add to the good or service. The GST in Australia currently stands at 10% and took effect in 2000 under the Howard government, replacing a wholesale sales tax and providing the further benefit of allowing a great number of smaller taxes to be eliminated.

The current controversy surrounding tax forum 2011 and the GST involves a push by some, most notably independent MP Tony Windsor, one of the independents with whom Gillard made the deal that allowed her to form her government last year, to increase the GST. Before you tax-opposed immediately recoil in fear or grow red in the face with apoplectic anger, let me assure you that increasing the overall tax burden is not being suggested. Windsor advocates raising the GST by 1 percentage point, to 11%, and eliminating the 115 superfluous taxes, keeping tax revenues more or less the same but making the system less complicated and decreasing the cost to businesses.

The Gillard government, however, has asserted that the 10% tax rate is not up for debate at the tax forum. The only formal role it will have at the forum will be a panel to discuss the GST’s distribution, which has been criticized by some states that pay in more than they get back.

The merits of raising the GST in Australia would be a simplified tax system. CPA Australia, a global accounting body, suggests that raising the GST would ultimately be beneficial, with the abolition of inefficient taxes, such as insurance taxes, motor vehicle taxes, the commercial conveyancing duty, and the payroll tax, resulting in increased productivity for businesses. On the other side of the debate, Treasury argues that the GST costs more to collect than other taxes and, according to Executive Director Rob Heferen, is “less than robust” as Australians spend more of their money on tax-free items.

Still, the Gillard government’s unwillingness even to discuss such a change at a tax forum convened for the express purpose of simplifying the tax system is somewhat puzzling, especially in light of the political havoc being wrecked by her proposed carbon tax. Clearly these are questions of some importance to Australia’s economy, but the political stakes are pretty high as well. It’s fairly clear that many business owners are not particularly happy right now, with small business taxes one of the major issues weighing on their minds. A recent survey of 3,900 owners of small and medium-sized businesses by MYOB found that 71% want a simplified Business Activity Statement and 75% want GST rules reviewed and clarified, with ⅓ saying that action in these departments could sway their votes. The fact that only one representative from the small business community is invited to the forum exacerbates concerns about the government. With a carbon tax-inspired approval rating of 23% and many businesses up in arms over the proposed legislation, can Gillard really afford to be so cavalier about the concerns of independent MPs and small business owners?

For now, tax kangaroos, it seems official debate on what is the GST’s ideal rate is closed, at least for this tax forum. But debate on tax rates in Australia most certainly is not. This is definitely one tax issue to keep an eye on.

Is Lodging a Tax Return Online Cost Effective?

Posted by Tax Advisor on 15 July, 2011

If you’re a financial person, when tax season comes around you learn not just what people’s finances are, but also how they view finances overall. Most people are stuck in a mode of money in, money out (and preferring the former to the latter). And while generally being a skinflint is a wise financial move, it also means that people aren’t considering one of the most valuable components of their finances: their time.

Which is why, even though it costs money, I always urge people to give lodging a tax return online a trybecause it saves you money. Here’s how:

First, I want you to consider bread.

Bread is something we tend to eat a lot of, and it’s also something we tend to buy a lot of–even though bread is among the easiest and cheapest food stuffs to make. This is because even though bread is simple (essentially flour + water + yeast + time), it’s that time bit that gets us. We could make all our own bread…or we go to work. Or spend a day with friends. Or read our kids a story. Spending that $3 on bread is more valuable, personally, than spending 3 hours on it. The same with lodging a tax return online.

When considering whether lodging a tax return online is a better idea than doing the paper forms yourself, consider how long it would take you to fill out those forms. Unless you’re a tax agent or a financial lawyer, I’m guessing a good long well. And, alas, the old adage is true: time is money. So the longer you spend doing those forms, the less money you have the potential to make. Moreover, the less free time you have to actually enjoy that money.

Of course, instead of lodging a tax return online, you could just pop in to the local tax agents. In terms of time, that would definitely remove the burden from you. But, in terms of cost…lodging a tax return online is definitely the way to go if price is any considering at all.

Fortunately, both lodging a tax return online and using a tax agent have a major benefit for you above and beyond cost and time calculation: they know their stuff. They know it because they’ve spent years learning it or have been programmed to know it. This means you’re more like to save money through previously unknown credits and refund opportunities. Which means you save time, you save money and you don’t have to spend hours poring over forms? Sounds like a no-brainer to me.


Julia Gillard, Nye Bevan, and the Carbon Tax

Posted by Tax Advisor on 15 July, 2011

Julia Gillard makes a political calculation that she hopes will pay off by the next election

There she was at the Laverton mill two weeks ago, the bright flame of her bob of copper hair only slightly muted by the blazing orange of hard hat and vest. As Julia Gillard listened to the puzzled miners of OneSteel in the Hunter valley, the furious backlash against her just unveiled carbon tax already swollen in the land, we fancied her mind wandering back to her patron saint and fellow Welsh-born Aneurin Bevan.

Back in the middle of the last century, Labor Health Minister Nye Bevan, himself a miner’s son, pushed through the legislation that made possible the UK’s National Health System. Despite the successes and failures of the NHS, this required the kind of deft negotiating skills not unlike those Gillard herself employed to make the controversial price on carbon a reality.

We imagine Prime Minister Gillard feels the full weight of Bevan’s regret at the moment. She has good cause to. The announcement of the carbon tax scheme has seen her popularity, and that of the Labor Party, tumble. The forces amassed against the tax have daily grown in strength and Gillard has been compelled to swap horse trade for sales pitch. She’s hit the road in quasi electoral mode, traveling from mill to mall in an attempt to build renewed support for the plan and win over the skeptics.

Gillard has the advantage of time: the next elections are fully two years away and opposition to the carbon tax may lessen by then. In the long haul though, she may well fail to win sufficient approval to ensure her reelection. But, for now, the Prime Minister is willing to risk all political capital, regardless of the will of the people. It is doubtful that the Greens and independents would default before the coming of the vote later this year to make the tax law. It seems that the surest way to see the tax derailed would be to have Julia Gillard deposed by members of her own party and that is unlikely to happen.

So, whether fortunate or unfortunate, the carbon tax is a reality we may soon all contend with. The question is how and how differently. Previously, we’ve spoken of how revenue from the tax would be used. We’ve also stressed repeatedly how, under the Labor plan, the wealthy would bear the brunt of the tax’s impact on households. Those with income in excess of $150,000 would receive little or no assistance from the government towards their increased energy costs. Their earnings would, in effect, go to subsidize the transition to cleaner energy fostered by the price on carbon. They are clearly, at least in the short term, the losers of the carbon tax. The long term effects of the carbon tax are not easily predicted, but many believe that the growing Australian economy, a current beacon in the world, may regress.

The winners are not so easily ascertained. To do so, we must look more closely at the details of the Government’s Clean Energy Plan released on July 10th, specifically at the personal tax reforms that would follow upon the implementation of the carbon tax. The reforms are targeted at low and middle-income earners and basically follow a three pronged approach. In the first place, the statutory tax-free threshold will be raised next June to $18,200, with a further increase to $19,400 in 2015. It is currently at $6000. This threefold increase will effectively replace most of the low-income tax offset (LITO), bringing it down from $1500 to $445 in 2012 and further to $300 on transition to a floating carbon price. These changes will be joined by a shift upwards of the marginal tax rates, from 15% to 19% for those who fall below the new $18,200 threshold and from 30% to 32.5% for those who earn less than the $37,000 point at which LITO starts to phase-out. The rates for those who make $80K and above will remain the same.

All this may seem rather arcane, especially as a partial aim of the changes is to increase transparency in the tax system, but combined with increases in the Family Tax Benefit, and in pensions and allowances, these adjustments have interesting, at times odd consequences regarding who gets what and how much. It ultimately adds up to a tale of multiple thresholds, with some households to benefit more, irrespective of whether they fall well ahead of others in income levels but in line with other factors such as their marital status, age, and number of dependents.

If the carbon tax is enacted, the much power you consume will make a difference to how much you net from the changes in taxation. This of course is the larger point of the carbon tax, and that is to try to seduce the consumer to shift to less energy intensive habits in the medium term and, finally, to cleaner but more costly sources of energy. We may soon realise the success or failure of this undertaking.

What’s New for the 2010-11 Tax Lodgment Season?

Posted by Tax Advisor on 15 June, 2011

Another tax season is about to begin, and even though the major changes outlined in the 2011 budget have yet to become law there are a few exemptions and deductions in effect for the 2010-11 income year that you should take note of as you prepare to lodge your tax return.

We provide a summary below. Once again, we’ve made sure to integrate these developments in our ELodge system to ensure your lodgment with us goes as smoothly as possible.

ATO updates for 2011

Tax exemptions for payments made following natural disasters in 2010-11.

The Government has introduced legislation under which the following payments would be free of tax:

  • Disaster income recovery subsidy paid for Cyclone Yasi and the floods than began on November 29th, 2010.
  • Clean-up and recovery grants paid to small business and primary producers under category C of the Natural Disaster Relief and Recovery arrangements for Cyclone Yasi and flooding which started on 29 November 2010.
  • Voluntary, ex-gratia payments made by the Commonwealth to New Zealand non-protected special category visa holders after an Australian natural disaster in the 2010-11 income year.

Tax deduction for donations made towards natural disasters assistance:

  • Those who made donations of $2 or more to bucket collections collections conducted by an approved organisation for natural disasters can claim a tax deduction of up to $10 for the total of their contributions without having a receipt.
  • The natural disasters included are: the floods in Queensland, New South Wales, and Victoria; the bushfires in Western Australia; Cyclone Yasi in Queensland, and the earthquakes in Christchurch and north-eastern Japan.
  • If a donation of more than $2 was made over the phone or via the web, a credit card statement or web receipt will be accepted. Store or bank receipts are sufficient for donations made through third parties such as banks and retail outlets. Contributions made through workplace-giving arrangements are shown on the payment summary.

Study expense deductions for the recipients of Youth Allowance, Austudy, & ABSTUDY.

A recent decision of the High Court has made it possible for those who receive Youth Allowance, Austudy, or ABSTUDY to claim a deduction for their study expenses.

This entitlement is not affected by the Government’s announcement in the 2011 Federal Budget that it intended to prevent deductions being claimed against all government assistance payments from July 1st, 2011.

Deductions for job search expenses incurred by Newstart and Youth Allowance recipients.

The same High Court decision also allows Newstart or Youth Allowance job seekers to claim deductions for expenses they incurred while actively seeking paid employment. Included are expenses recorded while meeting the requirements of the Employment Pathway Plan.

These are expenses that can be claimed:

  • Short term travel costs, for example travelling to a job interview.
  • Text books and training courses, including self-employment training and assistance.
  • The cost of phone calls made seeking paid work.
  • Costs incurred in resume preparation.

However, the following expenses cannot be claimed:

  • Expenses of a domestic or private nature, such as grooming, meals, and conventional clothing that relate to seeking a job only in a general way.
  • Expenses paid for by a Job Services Australia Provided.

Australian Taxation Office (ATO) Phony E-mail Scam

Posted by Tax Advisor on 15 September, 2010

The Australian Taxation Office has released a warning to the Australian public concerning a fraudulant e-mail scam that is being circulated. This e-mail is designed to offer a phony 30% discount on their taxes in order to obtain taxpayers’ personal information. The e-mail uses the official logo of The Australian Taxation Office, and contains ‘Cut Off Taxes Program (COTP) has been released – Join Now’ in the subject of the message.

Be aware, this may be only one variation of the fraudulant e-mail. “These websites are often set up in multiple jurisdictions making them difficult to trace and to effectively shut them down.” said Australian Tax Commissioner Michael D’Ascenzo.

How can YOU protect yourself?

This particular e-mail contains a link that will direct you to a fraudulent Tax Office website. One of the key identifiers of these scam sites is the instructions asking for personal information such as your tax file number. Be careful with any e-mail claiming to be from ATO that asks for any sensitive information. “The Tax Office never sends e-mails asking people to provide personal information including tax file numbers,” Mr D’Ascenzo said. The ATO advises that if anyone receives one of these messages that they should delete it immediately.

Mr D’Ascenzo went on to advise, “As an extra precaution we recommend you type internet addresses directly into your internet browser rather than clicking on links embedded in emails.”

In this specific instance, it will be much easier to not be cozen by links that appear to lead you to one address, but they actually direct you to another.

D’Ascenzo stated “If people have entered their tax file number or personal information on the website they should contact us immediately on 13 28 61.”

– Article by Tax Professionals at ELodge.com.au

Is E Tax Faster Than Lodging By Myself?

Posted by Tax Advisor on 15 July, 2010

For too many Australians, lodging taxes is more of a chore than it needs to be, because they choose to lodge taxes by hand instead of using an e tax service. Some of those people–like the elderly–are just not computer savvy. But others don’t lodge online because they don’t understand how safe, fast, and efficient it is!

E tax lodging not only makes tax time go by a lot quicker, but it also has other added benefits, such as:

  • Being able to check your status. Most e tax programs let you track the status of your forms as they go through the depths of the ATO. This means you have a better idea of when your form was submitted and received (rather than just the day you posted it). This gives you information you can use when you’re investigating why your refund is still not there.
  • E tax is incredibly secure–with the right site. We’re not going to tell you that every single e tax programme out there is 100% secure and safe, but the vast majority of them are. People worry about lodging tax online, but the truth is, as long as you double check the site it’s no more dangerous than the post.
  • E tax saves you money. Lodging tax by yourself, you might not be aware of all the credits, rules, and regulations you qualify for in order to get the most money back. Lodging with a tax agent, you might learn what they are, but with a hefty hit to your wallet. E tax services not only lodge your taxes faster than doing them by hand or with a tax agent, they also help you take advantage of the most credits and refunds!

E tax may not be for everyone, but it’s not going away any time soon. In fact, many countries, states, and municipalities around the world are considering a switch to solely online tax. So instead of calculating your forms out by hand this tax year, consider lodging them online. You’ll be amazed at how much time and money you save!

Time to Lodge Tax Return!

Posted by Tax Advisor on 15 July, 2009

What’s new when you lodge tax return?

The tax season is just under way and it is time again to lodge your tax return. The Australian Taxation Office’s (ATO) ever-changing tax code is designed to accomodate today’s economy. Be aware of some of the changes below for the 2009 tax year. Our tax wizard accomodates these changes so that you will not have to worry while you lodge your tax return online, even if you’re unsure how these updates affect you.

• First Home Saver Accounts: Starting 1 October, 2008 you may open a First Home Saver Account if you are eligable. The Australian Government may make a contribution to this account based on the amount that you have contributed to your First Home Saver Account. Any earnings that are accrued with this account are tax-exempt and you will not need to declare income from this account when you lodge your tax return. If, however, you are not required to lodge a tax return, you will need to lodge a First Home Saver Account with the Australian Taxation Office.

• Education Tax Credit: The Australian Taxation Office has introduced the Education Tax Credit which allows parents of children who are undertaking primary or secondary school studies to claim a refund on some of the education expenses. This rebate also applies to independent students under the age of 25.

• Medicare Levy Surcharge Relief: In previous years, non-privately insured taxpayers earning more than $50,000 ($100,000 if married or defacto) were required to pay an additional 1% levy on their income. After a number of years, this threshold was finally increased to $70,000 ($140,000 if married or defacto).

• Family Tax Benefit: The option to claim the family tax benefit (FTB) payments through the tax system was removed by the 2008 Federal Budget. The Australian Taxation Office will not accept any current or prior family tax benefit claims on or beyond 1 July, 2009. Rather, You will need to apply to the Family Assistance Office (FAO) to claim family tax benefits for the year 1 July 2008 to 30 June 2009 and future years.

• HECS -HELP benefit: The HECS-HELP benefit has been introduced by the Australian Government and is available to the following qualifiers:

• Mathematics and science graduates who have completed their natural and physical science course during or after their second semester 2008, and are employed in specified related occupations.

• Early childhood education teachers who work in specified locations including regional or remote areas, Indigenous Australian communities or areas of high socio-economic disadvantage.

Lodge tax returns at TaxPack and maximise your tax refund.

Our range of information and professional assistance and services are available to help you meet your obligations. We offer a secure and simple interface for you to input your financial information for the past year. Within minutes, you can have a calculation of your tax refund and then have your return lodged electronically. There is no need to mail any documentation to the Australian Taxation Office because we will lodge tax returns through our secure network. TaxPack will handle the complex tax calculations through our carefully designed tax wizard. Live chat assistance is also available at no charge if you happen to have any questions or concerns while you lodge your tax return.

2009 Economic Stimulus Tax Bonus

Posted by Tax Advisor on 15 June, 2009

The Government will provide eligible taxpayers with a tax bonus payment of up to $900 upon determining eligibility for the 2007-2008 financial year. Approximately 8.7 million taxpayers will benefit from this. The bonus will be a direct payment to taxpayers through electronic transfer or cheque. The bonus payment is tax free and will not be used to offset any of your other tax debts.

Who is eligible for this bonus?

You must be an Australian resident for tax purposes during the 2007-2008 financial year and your return must be lodged by 30 June, 2009 or by the deferred date granted to you by the Australian Taxation Office. In addition, your 2007-2008 taxable income must not exceed $100,000 and the adjusted tax liability must be greater than zero.

If you were an Australian resident for tax purposes for the 2007–2008 financial year, and you meet all the other eligibility criteria, you are eligible for the bonus payment. This applies even if you were here on a temporary resident visa.

If you, your tax agent, or accountant were affected by a natural disaster or sustained significant injury or illness resulting in hospitalisation for more than two weeks, you have until 30 June, 2010 to lodge your return and qualify for the Economic Stimulus Tax Bonus. However, this only applies if the natural disaster or significant injury or illness occurred between 1 January, 2008 and 30 June, 2009 inclusive.

How much money will I receive?

  • A $900 bonus will be paid to taxpayers with taxable income up to and including $80,000.
  • A $600 bonus will be paid to taxpayers with income exceeding $80,000 to $90,000.
  • A $250 bonus will be paid to taxpayers with income exceeding $90,000 to and including $100,000.

How can I receive my 2009 Economic Stimulus Tax Bonus?

You may receive the Economic Stimulus Bonus by simply lodging your 2007-2008 financial years at
If eligible, the tax bonus payment will be sent to you automatically.

When will I receive the Economic Stimulus Tax Bonus?

If you were eligible and lodged your 2007-2008 tax returns before the end of March 2009 you should have received your payment by now. Filers who lodged after the end of March 2009 can expect payment within four weeks of receiving the income tax notice of assessment. The payment is provided automatically according to the details provided in your 2007-2008 tax return. If you lodge your return after 15 June, 2009 you will not receive your notice of assessment until late July 2009. Thus, your Economic Stimulus Bonus should arrive mid August 2009. You must lodge your 2007-2008 income tax returns by 30 June, 2009 or you will miss out on the Economic Stimulus Tax Bonus unless you were granted a deferral by the Australian Taxation Office prior to 18 February, 2009.