What is Income?
Income is money you receive from salary and wages, interest, dividends, rental income, Centrelink payments, net profit from sale of property and shares etc. See the type of income you must declare below:
What is Tax Deductions?
Deductions are expenses incurred directly related to earning your income. You can claim work-related expenses as deductions to reduce the amount of tax you pay. In some cases you can claim tax deductions without receipts.
What Income is Taxable?
The equation for Taxable Income = Income – Deductions.
The amount of tax you pay depends on the amount of your Taxable Income and applicable Income Tax Rates and Brackets.
What is Tax Offsets?
Tax Offsets or Rebates may directly reduce the amount of tax you pay if you are eligible for certain tax offsets or government rebates, even to $0, but tax offsets alone can’t get you a refund.
Accessing your Income Statements
We can pre-fill most income from the Tax Agent Portal as the ATO receive income information from employers and financial institutions. However, there may be some information you will need to declare manually such as rental income, overseas income and capital gains income etc.
Whether your income is manually reported or pre-filled, you have an obligation to ensure it is accurate and complete.
Type of Income You Have to Declare:
1. EMPLOYMENT INCOME:
- Salary/wages
- commissions
- bonuses
- allowances for car, travel, tools
- parental leave
- dad-and-partner pay
- income protection policy
- sickness or accident insurance policy
- a workers compensation scheme
- overseas employment income
- Australia Army, Naval, Air Force Reserve – pay and allowances for continuous full-time service.
2. OTHER EMPLOYMENT INCOME:
- tips, gratuities and payments
- consultation fees
- payment for voluntary services
- jury attendance fees
- Lump-Sum Payments that exceed tax-free limit:
- termination payment
- genuine redundancy
- unused annual leave
- unused long service leave
- arrears income owed to you from the prior year
- Reportable fringe benefits
Government and Centrelink payments
- Abstudy
- Age Pension
- Newstart Allowance
- Carer Allowance
- JobSeeker Payment
- Carer Payment
- Carer Supplement
- Youth Allowance
- Defence Force income support allowance (DFISA) where the pension, payment or allowance to which it relates is taxable
- Veteran payment
- invalidity service pension, if you have reached age pension age
- disability support pension income, if you have reached pension age
- income support supplement
- sickness allowance
- parenting payment
- disaster recovery allowance.
Investment Income:
Rental Income from Investment Properties:
Rental income is taxable income therefore you must give us the full amount of any rent and rent-related expense that you receive, download our Rental Income and Expenses Template.
Dividends Income:
Dividends can be paid as money or through other property such as Shares via Dividend Re-investment Scheme Please give a dividend statement for the financial year. A dividend taxable income is paid from:
- ASX listed investment company
- Public trading trust
- Corporate unit trust (company)
- Corporate limited partnership
Franking Credits aka Imputation Credits:
Franked dividends have a franking credit attached to them which represents the amount of tax the company or entity has already paid. This means that shareholders receive a rebate for the tax paid by the company on profits distributed as dividends.
Most dividends have imputation credits franking credits attached, this imputation credit is also a type of taxable income that you have to declare.
Capital Gains:
Capital gain is the difference between your the amount you paid for a property and your capital proceeds. You can also make a capital gain if a managed fund or other unit trust distributes a capital gain to you. As an individual, a capital gain is treated as part of your total income.
Managed Investment Funds:
The following are what income is taxable from any trust investment products:
- cash management trust
- unit trust
- money market trust
- mortgage trust
- property trust
- share trust
- equity trust
- growth trust
- imputation trust or;
- balanced trust
Business Income from sole trading – you are a Sole Trader:
If you earn business or sole trader income, the net income is taxable. Please give us your business profit and loss statement or grant us access to your online accounting software. Alternatively, you can download and complete our Profit and Loss Template.
Trust Income distribution to beneficiaries:
If you receive Income from a trust, you need to declare the amount of your entitlement of the trust’s income. Whether you receive cash distribution or not, you may still pay tax on it. An exception to this is, if the family trust distribution tax has already paid the tax, then you don’t need to declare.
Partnership Income and partnership tax rate australia:
There is no partnership income tax or tax rates. A Partnership lodges a Partnership Tax Return but does not pay tax on its income.
The partnership tax return shows the distribution of net income or loss between the partners. The income you need to declare is the amount of your share of the partnership income splitting or loss to in your Individual Tax Return. This is whether or not they actually received the income.
