Tax Advice Intended for Various Issues

Understanding Tax Advice

Understanding the tax and how it affects you can be complicated. As a tax payer, you need to have a wide knowledge about taxes and its processes. Nowadays, there are issues with taxes and one should be aware of how to solve it by means of seeking tax advice.

Tax advice for Australian citizens

Every country has a variety of tax rules, policies, and guidelines intended to help their citizens. In Australia, there is also an established tax guideline. Tax issues and problems can’t be avoided, that is why it is significant as an individual to be directed by tax advice.

  • There is a financial year or budget year, which is the period used for calculating annual or yearly the financial statements. This could also serve as a guide for paying taxes.  The Australian financial year is from July 1 to June 30.
  • Australian tax returns for the tax year ending in June 30 are usually due on October 31 of the same calendar year. Also by October 31 for each year all Australian taxpayers should complete a tax return known as the tax pack – a free document designed to help individuals complete their return. This is a self-assessment system, whereby each taxpayer announces their particular income and allowances to determine their own tax liability.
  • Another important device is the Tax File Number. Every resident in Australia who earns money from employment or investment must have a Tax File Number (TFN). The TFN can be applied at a Tax office or online and will be delivered to you within 10-28 days.  This should be done at the earliest time possible. The TFN is valuable because it protects you from not getting taxed on a higher rate.
  • There is also something for businesses, the Australian Business Number (ABN).  This is applicable for everyone managing a business; registration for this number is a must and an important piece of tax advice. You will also need to apply for the Goods and Services Tax (GST) if your turnover exceeds $75,000 per annum.

Tax advice on income tax

Income tax in Australia is one of the most important revenue streams within Australian taxation system. This tax is levied upon 3 sources of income for individual tax payers: personal earnings like salary and wages, business income, and capital gains.

  • It is a must that the income tax, which is a specified amount, should be deducted from the employee’s salaries for every pay period. The deduction should be made by the employer.
  • Tax advice for those who are not employed or in business for themselves is to complete a quarterly Business Activity Statement (BAS) to consider for their business tax, GST, superannuation fund payments, and so on. The system is also known as Pay As You Go (PAYG).
  • Individuals with investment income, like rental income or dividends from shares more than $2000, will usually need to complete a quarterly Installment Activity Statement, and pay the tax due. This is also applicable for Pay As You Go (PAYG) users. You could still shift into one annual payment if your PAYG tax is less than $8000.

Tax advice on other taxes

  • Tax advice on Capital Gains Tax (CGT): In the context of the Australian taxation system applies to the capital gain made on disposal of any asset, except for specific exemptions.  The best known exemption is the family home. CGT on assets such as shares or investment property are included in the assessable income and taxed at the individual’s highest rate of tax, but if the asset has been held for at least one year, the liability is reduced by 50%.
  • Tax advice on Goods and Services Tax (GST):  This tax is a broad sales tax of 10% on most goods and services transactions in Australia. It is a value added tax, not a sales tax, in that it is refunded to all parties in the chain of production other than the final consumer. For individuals, there is no choice but to pay it since it is governed by the law. The business must account for GST on its sales and purchases.
Tax advice

Tax advice—stevendepolo (Flickr.com)

Tax advice on Foreign Income

Foreign income pertains to foreign wages or income, for instance those coming from foreign property and dividends from shares in foreign companies. As a guideline, Australian residents must pay tax on all income, whether it’s from in Australia or overseas, but it may be possible to offset tax already paid in the foreign country.