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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.

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