Tax Pack 2010

Instructions for taxpayers
TaxPack 2010
To help you complete your tax return 1 July 2009 30 June 2010
Lodge online with e-tax its free.
Secure and user friendly Most refunds in 14 days or less n Built-in checks and calculators to help you n Pre-filling service download your personal tax information from the ATO
n n
You may also need the separate publication TaxPack 2010 supplement see page 2.
Lodge your tax return by 31 October 2010.
Go to www.ato.gov.au
NAT 09766.2010
Commissioners foreword
TaxPack 2010 is a guide to help you correctly complete your 2010 tax return. We have tried to make it easy to use, and for most people it will provide all you need to know to fill in your tax return. Be assured that if you do your best to fill in your tax return correctly, you will not be subject to any penalties if you get these things wrong. Nevertheless, please take care in ensuring that the information you provide to us is as complete and accurate as you can make it. If you have access to the internet, you can prepare and lodge your tax return online using e-tax. Its fast, free and easy, and most refunds are issued within 14 days. It also provides more extensive information than contained in this guide and allows you to automatically include on your tax return some information that we already know about you. We also have a range of services that can assist you when completing your tax return. The inside back cover provides details about how you can access these services and how you can contact us.
Michael DAscenzo Commissioner of Taxation
COMMONWEALTH OF AUSTRALIA 2010 This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Commonwealth. Requests and enquiries concerning reproduction and rights should be addressed to the Commonwealth Copyright Administration, Attorney-Generals Department, 35 National Circuit, Barton ACT 2600 or posted at http://www.ag.gov.au/cca
Taxpayers may copy parts of TaxPack 2010 and TaxPack 2010 supplement for their personal records. Published by the Australian Taxation Office, Canberra, May 2010. Printed by Independent Print Media Group Pty Ltd (IPMG). Distribution coordinated by Independent Print Media Group Pty Ltd (IPMG) and effected by Australia Post and NDD Distribution Pty Ltd. Thanks to the staff of the Tax Office, tax professionals and members of the community who contributed to TaxPack 2010.
Contents
WillyouneedTaxPack 2010 supplement? Whatsnewthisyear? CompletingIndividualinformationonyourtaxreturn
2 3 4 5 7 8 9 11 12 13 15 17 18 19 20 22 25 26 27 28 29 33 34 36 39 41 44 45 46 47 48 49 49 50 54
INCOME 1 Salaryorwages 2 Allowances,earnings,tips,directorsfeesetc 3 Employerlumpsumpayments 4 Employmentterminationpayments(ETPs) 5 AustralianGovernmentallowances andpayments 6 AustralianGovernmentpensions andallowances 7 Australianannuitiesandsuperannuation incomestreams 8 Australiansuperannuationlumpsumpayments 9 Attributedpersonalservicesincome Total tax withheld 10 Grossinterest 11 Dividends 12 Employeeshareschemes Income that you show on the supplementary section of the tax return Total income or loss DEDUCTIONS Claiming deductions Car and travel expenses D1 Work-relatedcarexpenses D2 Work-relatedtravelexpenses D3 Work-relatedclothing,laundryand dry-cleaningexpenses D4 Work-relatedself-educationexpenses D5 Otherwork-relatedexpenses D6 Low-valuepooldeduction D7 Interestdeductions D8 Dividenddeductions D9 Giftsordonations D10 Costofmanagingtaxaffairs Deductions that you show on the supplementary section of the tax return Total deductions Subtotal LOSSES L1 Taxlossesofearlierincomeyears Taxable income or loss
TAX OFFSETS Adjusted taxable income (ATI) for you and your dependants T1 Spouse(withoutdependentchildorstudent), child-housekeeperorhousekeeper Rebate income T2 SeniorAustralians(includesagepensioners, servicepensionersandself-fundedretirees) T3 Pensioner T4 Australiansuperannuationincomestream T5 Privatehealthinsurance T6 Educationtaxrefund Tax offsets that you show on the supplementary section of the tax return Total tax offsets Adjustments that you show on the supplementary section of the tax return PRIVATE HEALTH INSURANCE POLICY DETAILS MEDICARE LEVY M1 Medicarelevyreductionorexemption M2 Medicarelevysurcharge ADJUSTMENTS A1 Under18 A2 Part-yeartax-freethreshold A3 Superco-contribution INCOME TESTS
IT1 Totalreportablefringebenefitamounts IT2 Reportableemployersuperannuation contributions IT3 Tax-freegovernmentpensions IT4 Targetforeignincome IT5 Netfinancialinvestmentloss IT6 Netrentalpropertyloss IT7 Childsupportyoupaid
55 58 67 68 71 72 73 74 80 81 81 82 83 89 95 96 97 101 101 102 102 102 103 105 106
SPOUSE DETAILS MARRIED OR DE FACTO 107 INFORMATION Checklist Howweworkoutyourtax Amountsthatyoudonotpaytaxon Doyouneedtolodgeataxreturn? Non-lodgment advice 2010 Specialcircumstancesandglossary Importantinformation Moreinformation
110 110 111 114 116 117 126 insidebackcover
TAXPACK 2010
Will you need TaxPack 2010 supplement?
YoumightneedTaxPack 2010 supplement whichcontainsquestionsthatarenotincludedin TaxPack 2010.Checkthelistbelowofquestions coveredinTaxPack 2010 supplementtoseewhether youneedittocompleteyourtaxreturn.
INCOME 13 Incomefrompartnershipsandtrusts 14 Personalservicesincome(PSI)* 15 Netincomeorlossfrombusiness* 16 Deferrednon-commercialbusinesslosses* 17 Netfarmmanagementdepositsorwithdrawals 18 Capitalgains*(fromallsourcesincludingshares, realestateandotherproperty) 19 Foreignentities 20 Foreignsourceincomeandforeignassets orproperty,includingforeignsourcepension orannuity 21 Rent 22 Bonusesfromlifeinsurancecompaniesand friendlysocieties 23 Forestrymanagedinvestmentschemeincome 24 Otherincomethatis,incomenotlisted elsewhere DEDUCTIONS D11 Australianfilmindustryincentives* D12 Deductibleamountofundeductedpurchase priceofaforeignpensionorannuity D13 Personalsuperannuationcontributions(generally fortheself-employed) D14 Deductionforprojectpool D15 Forestrymanagedinvestmentschemededuction D16 Otherdeductionsthatis,deductionsnot claimableatitemsD1toD15orelsewhere onyourtaxreturn
TAX OFFSETS T7 Superannuationcontributionsonbehalfof yourspouse T8 Zoneoroverseasforces T9 20%taxoffsetonnetmedicalexpensesover thethresholdamount(thethresholdfor2010 is$1,500) T10 Parent,spousesparentorinvalidrelative T11 Landcareandwaterfacility T12 Netincomefromworkingsupplementary section T13 Entrepreneurstaxoffset T14 Othertaxoffsets ADJUSTMENT A4 Amountonwhichfamilytrustdistributiontax hasbeenpaid CREDIT FOR INTEREST ON TAX PAID C1 Creditforinterestonearlytaxpayments TAXATION OF FINANCIAL ARRANgEMENTS (TOFA) F1 Taxationoffinancialarrangements(TOFA)
IfyouneedTaxPack 2010 supplement,youcan getacopyfrommostnewsagentsfrom1Julyto 31October2010.Copiesarealsoavailableallyear fromourPublicationsDistributionService(seethe insidebackcover)andshopfronts. Questionsmarked*havearelatedpublicationwhich youmustreadbeforeyoucancompletetheitemon yourtaxreturn.
2
TAXPACK 2010
Whats new this year?
Removal of baby bonus Youcannotclaimthebabybonusfor200910 andfutureyears,butyoucanclaimitforpastyears (200102to200809)forwhichyouhavenotalready madeaclaim.Dependingonyourcircumstances,you canlodgeaclaim(upto30June2014)forthebaby bonuseither: nonthetaxreturnfortherelevantyearyouare claiming,or nontherelevantapprovedform. RefoRms to some entitlements Yourentitlementscouldbedifferentthisyearbecause thelawhaschanged.Youmighthavetocomplete sevennewitemsonpage8ofyour2010taxreturn and,ifyouhaveaspouse,anadditionalsixnew itemsonpages911.
Weneedthisinformationtoassess: nyourtaxoffsetentitlements nyoureligibilitytocertaindeductionsandtax concessions nanyMedicarelevysurcharge nHELPorSFSSrepaymentamounts.
employee shaRe schemes For200910andfutureyears,discountsonshares andrightsyouacquireunderanemployeeshare schemewillgenerallybeincludedinyourassessable incomeintheincomeyearinwhichyouacquirethe sharesorrights.However,deferralofthetaxliability ispossibleinlimitedcircumstances.Question12 dealswiththesechanges.
Thechangesalsolimitaccesstotheexistingtax exemptionofupto$1,000ofthetotaldiscounts received.
taxation of financial aRRangements (tofa) Newtaxationoffinancialarrangements(TOFA)rules havebeenintroducedtomodernisethetaxtreatment offinancialarrangements.

Therulesdonotapplyfor200910unlessyou makeanelectionforthistohappen. Therulesdonotgenerallyapplytoindividuals. Therulesareprimarilyintendedforlargeentities withcomplexfinancialarrangements.Youshould seekprofessionaladviceifyouareconsidering makinganyelectionsundertheserules. IftheTOFArulesapplytoyou,seeCompletingthe taxreturnforindividualswheretheTOFArulesapply inTaxationoffinancialarrangements(TOFA)available onourwebsiteatwww.ato.gov.au/tofa
same-sex couples For200910andfutureyearsthedefinitionof spousehaschangedsothatyourspouseincludes anotherperson(whetherofthesamesexoropposite sex)who: nyouwereinarelationshipwiththatwasregistered underaprescribedstateorterritorylaw, nalthoughnotlegallymarriedtoyou,livedwith youonagenuinedomesticbasisinarelationship asacouple. income eaRned in oveRseas employment Inmostcasesyouwillnowincludeyourforeign employmentincomeinyourassessableincome, andyoumaybeentitledtoataxoffsetfortheforeign taxyoupaidonyourforeignemploymentincome.
Yourforeignemploymentincomeisexempt onlyifyouearnedtheincomeasanaidworker, asacharitableworker,undercertaintypesof governmentemploymentoronprojectsthatare inthenationalinterest.
supeR co-contRibutions Inordertomoreaccuratelyassessyoursuper co-contributionentitlementsweneedtocollect enoughdetailsonyourtaxreturn.Thisyearto workoutyourentitlements,wewillsortamounts onyourtaxreturnintoeligibleincome,ineligible incomeandassessableincome.Youmayalsoneed tocompleteA3(seetheinstructionsonpage97).
TAXPACK 2010
Completing Individual information on your tax return
ItisimportantthatyoucompletetheIndividual informationonpages1and2ofyourtaxreturn accuratelytoavoiddelayingyournoticeof assessment.Wehaveprovidedexplanations belowforthetax-relateditemssothatyoucan completethesesectionscorrectly. Ifyouarenotsurewhetheryouhavetolodgea taxreturnseepage114formoreinformation.
YOUR TAX FILE NUMbER Yourtaxfilenumber(TFN)isshownonyourpayment summary,aswellasonyourlastnoticeofassessment. YoudonothavetoquoteyourTFNonyourtaxreturn, butyourassessmentmaybedelayedifyoudonot.If youarenewtothetaxsystemanddonthaveaTFN, phonetheIndividualInfolineon13 28 61. ARE YOU AN AUSTRALIAN RESIDENT? YoumustprintXintheYESboxifyouwerean Australianresidentfortaxpurposesforallorpart of200910.IfyouwerenotanAustralianresident fortaxpurposesduringanypartof200910printX intheNObox.
Generally,weconsideryoutobeanAustralian residentfortaxpurposesif: nyouhavealwayslivedinAustraliaoryouhave cometoAustraliaandliveherepermanently nyouhavebeeninAustraliacontinuouslyforsix monthsormore,andformostofthattimeyou workedintheonejobandlivedatthesameplace nyouhavebeeninAustraliaformorethansixmonths during200910,unlessyourusualhomeis overseasandyoudonotintendtoliveinAustralia nyougooverseastemporarilyandyoudonotset upapermanenthomeinanothercountry,or nyouareanoverseasstudentwhohascometo Australiatostudyandareenrolledinacourse thatismorethansixmonthslong. Ifyouneedhelpindecidingwhetherornotyouare anAustralianresidentfortaxpurposes,youcango totheAre you a resident?toolonourwebsiteor phonetheIndividualInfoline.
WILL YOU NEED TO LODgE AN AUSTRALIAN TAX RETURN IN THE FUTURE? Thismaybeyourlasttaxreturnif: nyourannualtaxableincomeinthefuturewillbe belowthetax-freethreshold($6,000for201011) nyouronlysourceofincomeinthefuturewillbean AustralianGovernmentpension nyouwillbecomeeligiblefortheseniorAustralians taxoffsetin201011,andyourtaxableincomeis belowthethresholdforlodgingataxreturnthisyear (forthresholdlevelsandeligibilityfor200910,see pages6870) nyouaremovingoverseaspermanently,or nyouare60yearsoldorolderandyouronlysource ofincomeisfromsuperannuationbenefits(both lumpsumandincomestreams)thathavealready beensubjecttotaxinthesuperannuationfund.
Dependingonyoursituation,printXintheYES,NO orDONT KNOWbox.
ELECTRONIC FUNDS TRANSFER FOR YOUR REFUND Its faster and simpler to have your refund paid directly into your financial institution account.
Ifyouwanttouseelectronicfundstransfer(EFT) toreceiveyourtaxrefund,printXintheYESbox atthequestionDo you want your refund paid directly into your financial institution account? andwritethesix-digitBSBnumber,accountnumber andaccountname(alsocalledaccounttitle)as shownonyouraccountrecords. Otherwise,printXintheNObox.
DECEASED ESTATE PrintDECEASEDESTATEonthetopofpage1of thetaxreturnandatthequestionWill you need to lodge an Australian tax return in the future?printX intheNObox.Theexecutororadministratorofthe estatemustsignthetaxreturnonbehalfofthe deceasedpersonandsendittous.
Has your residency status changed? Ifyourresidencystatusfortaxpurposeschanged during200910,thatis,youwerearesidentfor partof200910,youwillneedtoansweryestothis questionandcompleteitemA2onpage7ofyour taxreturn.Weneedthisinformationtoworkout yourtax-freethreshold.
4 TAXPACK 2010
Salary or wages
Income 1
Thisquestionisaboutincomefromsalaryorwages fromwhichtaxwaswithheld.Incomefromsalaryor wagesincludes: nsalaryandwages ncommissions nbonuses nincomefrompart-timeorcasualwork namountsforlostsalaryorwagespaidunder anincomeprotectionpolicy asicknessoraccidentinsurancepolicy,or aworkerscompensationscheme. From1July2009,therehavebeenchangesto theexemptionrulesforforeignemploymentincome. ShowthegrossincomefromyourPAYG payment summary foreign employment atthisitem.
Did you earn income from salary or wages shown on a PAYG payment summary individual non-business or PAYG payment summary foreign employment?
NO YES
Gotoquestion2. Readbelow.
IfyourPAYG payment summary individual non-businessorPAYG payment summary foreign employmentshowsanyallowances,includethem atitem2 Allowances, earnings, tips, directors fees etc.
ANSWERINg THIS QUESTION YouwillneedyourPAYG payment summary individual non-business, PAYG payment summary foreign employment,oracomparablestatementsuch asaletterorsignedstatementfromeachemployeror payer,showingthefollowingdetails: ngrossincome(shownasGrosspaymentson yourpaymentsummary) ntotaltaxwithheld nforeigntaxpaid,ifapplicable,and ntheemployersorpayersAustralianbusiness number(ABN)orwithholdingpayernumber(WPN).
Ifyoudonothaveallyourpaymentsummaries orcomparablestatements,contactyouremployer orpayer.Ifyouareunsuccessfulinobtaining anyofthese,moreinformationaboutmaking astatutorydeclarationisavailableonourwebsite atwww.ato.gov.au
Step 1 Printtheoccupationfromwhichyouearnedmostof yourincomefromsalaryorwagesunderYour main salary and wage occupationatitem1. Beasspecificaspossiblewhenyoudescribehow youearnedyoursalaryandwages,forexample, insuranceclerkratherthanclerk,facilities managerratherthanmanager,barattendant ratherthanstudent.Forpublicservants,provide worktype,forexample,callcentreoperator. Ifyouhavemorethanfivepaymentsummaries, gotostep5. Step 2 WritetheemployersorpayersABNorWPNfrom eachpaymentsummaryunderPayers Australian business numberatitem1. Step 3 ForeachPAYG payment summary individual non-business,writethetotaltaxwithheldshown onitunderTax withheld attheleftofCtoGitem1. ForeachPAYG payment summary foreign employmentwritethetotalAustraliantaxwithheld shownonitunderTax withheldattheleftofCtoG item1.
COMPLETINg YOUR TAX RETURN Forthepurposesofsteps1to5paymentsummary includescomparablestatementsandstatutory declarations.Donotcombineamountsfromdifferent paymentsummaries(unlessinstructedatsteps5 and6).
TAXPACK 2010
1 Salaryorwages
Step 4 Writethegrosspaymentamountsshownoneach paymentsummaryunderIncomeatCtoGitem1. Youhavenowfinishedthisquestion;gotoquestion2. Step 5 Ifyouhaveanyforeignpaymentsummaries,goto step6. Otherwise,followsteps2to4foryourfirstfour paymentsummaries.Then,foryourremaining paymentsummaries,addupthetotaltaxwithheld andwritethetotalattheleftofGitem1.Addup thegrosspaymentamountsandwritethetotalat Gitem1.LeavethePayers Australian business numberforGblank. Step 6 Sortyourforeignpaymentsummariesfromyour Australianpaymentsummaries. AddupthetotalAustraliantaxwithheldshownonall yourPAYG payment summary foreign employment andwritethetotalattheleftofCitem1.Addup thegrosspaymentamountsandwritethetotalat Citem1.LeavethePayers Australian business numberforCblank.
Addupthetotaltaxwithheldshownonallyour PAYG payment summary individual non-business andwritethetotalattheleftofDitem1.Addup thegrosspaymentamountsandwritethetotalat Ditem1.LeavethePayers Australian business numberforDblank. Youmaybeentitledtoaforeignincometaxoffset, refertoquestion20inTaxPack 2010 supplementfor furtherinformation. HELPFUL HINTS Donotattachyourpaymentsummariesand comparablestatementstoyourtaxreturn. Makesureyoukeepallyourrecordsforfiveyears. Ashorterrecord-keepingperiodmayapplyin somesituations.Moreinformationonrecord keepingandwrittenevidenceisavailableon ourwebsiteatwww.ato.gov.au
6
TAXPACK 2010
Allowances, earnings, tips, directors fees etc
Income 2
Thisquestionisaboutpaymentsofincomefrom working.Thesemayinclude: nallowances npaymentsfromwhichtaxwasnot withheld, includingsalary,wages,commissions,bonuses, incomeearnedfrompart-timeandcasualjobs, andincomefromincomeprotection,sicknessand accidentinsurancepolicies ntips,gratuitiesandpaymentsforyourservices nconsultationfeesandhonorariapaymentsfor voluntaryservices. Allowancesinclude: ncar,travelandtransportallowances,including reimbursementsofcarexpensescalculatedby referencetothedistancetravelledbythecar,such ascents-per-kilometreallowances nawardtransportpayments(paidunderanindustrial laworawardthatwasinforceon29October1986) ntool,clothingandlaundryallowances ndirt,height,site,firstaidandriskallowances nmealandentertainmentallowances.
Ifyoureceivedatravelallowanceoranovertime mealallowancepaidunderanindustriallaw,award oragreementyoudonothavetoincludeitonyour taxreturnif: nitwasnotshownonyourpaymentsummary nitdoesnotexceedtheCommissionersreasonable allowanceamount,and nyouspentthewholeamountondeductible expenses. Ifyouchoosenottoincludeityoucannotclaim adeductionforexpensesincurredinrelationto thatallowance.Formoreinformation,seeTaxation Determination TD 2009/15 Income tax: what are the reasonable travel and overtime meal allowance expense amounts for 200910 income year?.
Did you receive any of the above payments?

NO YES
ANSWERINg THIS QUESTION Youwillneedyourpaymentsummariesor comparablestatements(ordetailsofthepayments thatyoureceivediftheyarenotshownonapayment summaryorcomparablestatement).

Ifyoudonothaveallyourpaymentsummaries orcomparablestatements,contactyouremployer orpayer.Ifyouareunsuccessfulinobtaining anyofthese,moreinformationaboutmaking astatutorydeclarationisavailableonourwebsite atwww.ato.gov.au
COMPLETINg YOUR TAX RETURN Step 1 Addupanytaxwithheldfromthesepayments.

Donotincludeanyamountsoftaxwithheldyou haveshownatotheritems,suchasitem1. WritetheamountunderTax withheldattheleft ofKitem2. Step 2 Addupallofthesepayments. Donotincludeanyamountsofincomeyouhave shownatotheritems,suchasitem1. WritetheamountunderIncomeatKitem2.
TAXPACK 2010
3 Income
Employer lump sum payments
Thisquestionisaboutanylumpsumpaymentsyou receivedfromyouremployerforunusedannualleave orunusedlongserviceleave.
Did you receive any of these payments?

NO YES
Donotincludeanyemployerlumpsumpayments inarrearsornon-superannuationannuitypayments inarrearsshownatLumpsumEonyourpayment summary.Theseamountsaredealtwithatquestion24 Other incomeinTaxPack 2010 supplement.Similarly, lumpsumpaymentsinarrearsshownonyourPAYG payment summary superannuation income stream aredealtwithatitem7 Australian annuities and superannuation income streams. Donotincludepaymentsforearlyretirementor genuineredundancyshownatLumpsumDonyour PAYG payment summary individual non-business anywhereonyourtaxreturn,astheyarenottaxed.
ANSWERINg THIS QUESTION YouwillneedyourPAYG payment summary individual non-business, PAYG payment summary foreign employment oracomparablestatementfrom yourpayershowinganamountatLumpsumAor LumpsumBwhererelevant. Ifyoudonothaveallyourpaymentsummariesor comparablestatements,orifanyofyourcomparable statementsdonotshowanamountyoureceived duringtheyearthatiseitheraLumpsumAor aLumpsumBcontactyouremployerorpayer.If youareunsuccessfulinobtaininganyofthese,more informationaboutmakingastatutorydeclarationis availableonourwebsiteatwww.ato.gov.au IfyouhavereceivedaPAYG payment summary foreign employment showinganamountatLump sumAonwhichforeigntaxhasbeenpaidyouwill alsoneedtoincludetheamountatUinitem20. COMPLETINg YOUR TAX RETURN IfyoudonothaveanyamountsshownatLump sumAonyourpaymentsummaries,gotostep4. Amounts shown at Lump sum A on your payment summary Step 1 AddupthetotaltaxwithheldfromlumpsumA amountsshownonyourpaymentsummaries.Donot includeanyamountsoftaxwithheldyouhaveincluded atanyotheritem,suchasitem1or2. WritetheanswerunderTax withheldattheleft ofRitem3.
Step 2 AddupalllumpsumAamountsonyourpayment summaries. WritetheansweratRitem3.
8
Step 3 PrintintheTYPEboxattherightofR: Riftheamountrelatedtoagenuineredundancy payment,anearlyretirementschemepayment, ortheinvaliditysegmentofanemployment terminationpaymentorsuperannuationbenefit T forallothersituations. Checkwithyourpayerifyouarenotsure. IfyoudonothaveanyamountsshownatLump sumBonyourpaymentsummaries,youhave finishedthisquestion.Gotoquestion4.
Amounts shown at Lump sum b on your payment summary Step 4 AddupthetotaltaxwithheldfromlumpsumBamounts shownonyourpaymentsummaries.Donotincludeany amountsoftaxwithheldyouhaveincludedatstep1 aboveoratanyotheritem,suchasitem1or2. WritetheanswerunderTax withheldattheleftofH item3.
Step 5 AddupalllumpsumBamountsonyourpayment summaries. Dividethetotalby20toworkout5%oftheamounts. Only5%oftheseamountsistaxable. WritetheansweratHitem3.
MORE INFORMATION Formoreinformation,gotoourwebsiteat www.ato.gov.auandenterLumpsumpayments intheSearchforboxatthetopofthepage.
TAXPACK 2010
Employment termination payments (ETPs)
Income 4
Thisquestionisaboutemploymenttermination payments(ETPs),whichyoureceivedasaresult oftheterminationofyouremployment. ThesepaymentsareshownonaPAYG payment summary employment termination payment. Thisitemalsoincludes: ndeathbenefitETPsthesearecertainpayments madeasaconsequenceofthecessationofa personsemploymentthatyoureceivedduetothat personsdeath(seepage124formoreinformation) nforeignETPsthesearecertainETPsreceived fromoverseasemploymentwhichwereexempt fromincometaxunderthatcountryslaw(see page117formoreinformation) nlateterminationpaymentsthesearecertain ETPsyoureceivedmorethan12monthsafter youretiredorceasedemployment(seepage124 formoreinformation) ntransitionalterminationpaymentstheseare certainETPsyouwereentitledtoon9May2006 (seepage124formoreinformation).
Donotshowthefollowingpaymentsanywhere onyourtaxreturn: nforeignterminationpaymentsthesearecertain terminationpaymentsthatwerenotexemptfrom incometaxoftheforeigncountry(seepage123 formoreinformation) ndirectedterminationpaymentstheseare transitionalterminationpaymentsthatcan, atyourrequest,bepaidbyyouremployerto acomplyingsuperannuationfundortopurchase asuperannuationannuity nETPsyoureceivedasthetrusteeofadeceased estate(thesepaymentsmustbeshownonthe trusttaxreturnofthedeceasedestate).
Did you receive an ETP?

NO YES
ANSWERINg THIS QUESTION YouwillneedyourPAYG payment summary employment termination payment.

Ifyoudonothaveallyourpaymentsummaries, contactyouremployerorpayer.Ifyouare unsuccessfulinobtaininganyofthese,more informationaboutmakingastatutorydeclaration isavailableonourwebsiteatwww.ato.gov.au IfyouhavereceivedaforeignETP,yourforeign employermaynothaveissuedyouwithaPAYG payment summary employment termination payment.Seepage117forfurtherinstructions. Forinformationaboutlate termination payments, transitional termination payments, foreign termination payments,directed termination paymentsanddeath benefits dependants, seepages1235.
COMPLETINg YOUR TAX RETURN IfyoureceivedtwoormoreETPs,gotostep5. Otherwise,readon.

Step 1 Writeintheleftcolumnatitem4thedateofpayment andyourpayersAustralianbusinessnumber(ABN), asshownonyourPAYG payment summary employment termination payment. Step 2 Writethetotalamountoftaxwithheldfromyour ETP,asshownonyourPAYG payment summary employment termination payment,underTax withheld attheleftofIitem4.
TAXPACK 2010
4 Employmentterminationpayments(ETPs)
Step 3 WritethetaxablecomponentofyourETP,asshown onyourPAYG payment summary employment termination payment,atIitem4. Step 4 Printtheappropriatecodeletterforthepayment typeintheTYPEboxattherightofIonyourtax return.Ifnoneofthefollowingapplytoyou,leave theboxblank. Tifyoureceivedatransitionalterminationpayment S ifyoureceivedanETPin200910thatwasnot atransitionalterminationpaymentoradeath benefitETPandyouhadreceivedanothersuch ETPinanearlierincomeyearfor the same termination of employment DifyoureceivedadeathbenefitETPandyouwere adeath benefits dependant bifyoureceivedadeathbenefitETPin200910 andyouwerenotadeathbenefitsdependantand youhadreceivedanotherdeathbenefitETPin anearlierincomeyearfor the same termination of employment NifyoureceivedadeathbenefitETPandyouwere notadeathbenefitsdependant,andcodeBdoes notapply. Youhavenowfinishedthisquestion,gotoquestion5.
Step 5 IfyoureceivedtwoormoreETPs,youneedto completeanEmployment termination payment schedule(NAT71744)usingtheinformationshown onyourpaymentsummaries.Youcanobtainacopy oftheschedulefromourwebsiteorbyphoning ourIndividualInfoline(seetheinsidebackcover). Step 6 Whenyouhavecompletedtheschedule,transfer thetotalsyouhavewrittenonittoitem4onyour taxreturn.Writethetotaltaxwithheldunder Tax withheldattheleftofI,writethetotaltaxable componentatI,andprintthecodeletterMinthe TYPEbox. DonotwriteanydateofpaymentorpayersABN onyourtaxreturn. Step 7 Attachyourscheduletopage3ofyourtaxreturn andprintXintheYESboxatTaxpayers declaration question2aonpage12ofyourtaxreturn.
MORE INFORMATION FormoreinformationonETPs,readEmployment termination payments (NAT70643)andEmployment termination payments transitional arrangements (NAT70644).
10
TAXPACK 2010
Australian Government allowances and payments
Income 5
ThisquestionisaboutthefollowingAustralian Governmentpayments: nparentingpayment(partnered) nNewstartallowance nyouthallowance nmatureageallowance npartnerallowance nsicknessallowance nspecialbenefit nwidowallowance nAustudypayment nexceptionalcircumstancesreliefpayment ninterimincomesupportpayment neducationpaymentofanyofthefollowingwhen youwere16yearsoldorolder ABSTUDYlivingallowance paymentundertheVeteransChildren EducationScheme paymentundertheMilitaryRehabilitationand CompensationActEducationandTraining Scheme2004shownasMRCAEducation AllowanceonyourPAYG payment summary individual non-business
nothertaxableCommonwealtheducationor
trainingpayments
nincomesupportcomponentfromaCommunity
DevelopmentEmploymentProject(CDEP)shown asCommunityDevelopmentEmploymentProjects (CDEP)paymentsonyourPAYG payment summary individual non-business nCDEPschemeparticipantsupplement nNorthernTerritoryCDEPtransitionpayment. DonotincludeanyAustralianGovernment allowancesandpaymentsthatarenottaxable, showtheseatitemIT3 Tax-free government pensionsseeAmounts that you do not pay tax ononpages11113.

NO YES
ANSWERINg THIS QUESTION Youwillneed: nyourPAYG payment summary individual non-business,or naletterfromtheagencythatpaidyourallowance orpaymentstatingtheamountyoureceived.
Ifyouhavenotreceivedthisinformationoryouhave lostit,contacttheagencythatpaidyou.
Step 2 Adduptheincomeshownoneachofyourpayment summariesandletters. WritethetotalatAitem5. HELPFUL HINT Ifyouprepareyourtaxreturnonlineusinge-tax, youcanusethepre-fillingservicetodownload thesepaymentsdirectlytoyourtaxreturn.
COMPLETINg YOUR TAX RETURN Step 1 Addupthetaxwithheldshownoneachofyour paymentsummariesandletters.

WritethetotalunderTax withheldattheleftof Aitem5.
TAXPACK 2010
11
6 Income
Australian Government pensions and allowances
ThisquestionisaboutthefollowingAustralian Governmentpayments: nagepension nbereavementallowance ncarerpayment ndisabilitysupportpension,ifyouhavereached age-pensionage neducationentrypayment nparentingpayment(single) nwidowBpension nwifepension,ifeitheryouoryourpartnerwas ofage-pensionage nageservicepension nincomesupportsupplement nDefenceForceincomesupportallowance(DFISA) wherethepension,paymentorallowancetowhich itrelatesistaxable
nDFISA-likepaymentfromtheDepartmentof
VeteransAffairs(DVA) age-pensionage
ninvalidityservicepension,ifyouhavereached npartnerservicepension.
DonotincludeanyAustralianGovernmentpensions orallowancesthatarenottaxable,theseshouldbe shownatitemIT3 Tax-free government pensions seeAmounts that you do not pay tax onon pages11113.

NO YES
ANSWERINg THIS QUESTION Youwillneed: nyourPAYG payment summary individual non-business,or naletterfromtheagencythatpaidyourpension, allowanceorpaymentstatingtheamountthat youreceived.
Ifyouhavenotreceivedthisinformation,oryou havelostit,contacttheagencythatpaidyou.
TAX TIPS Youmaybeentitledtoataxoffsetonthisincome. MakesureyouworkthroughquestionsT2 Senior AustraliansandT3 Pensionertoseewhether youareentitledtoataxoffset.
HELPFUL HINTS Ifyouprepareyourtaxreturnonlineusinge-tax, youcanusethepre-fillingservicetodownload thesepaymentsdirectlytoyourtaxreturn.
COMPLETINg YOUR TAX RETURN Step 1 Addupthetaxwithheldshownoneachofyour paymentsummariesandletters.

WritethetotalunderTax withheldattheleftofB item6. Step 2 Adduptheincomeshownoneachofyourpayment summariesandletters. WritethetotalatBitem6.
12
TAXPACK 2010
Australian annuities and superannuation income streams
Income 7
Thisquestionisaboutincomeyoureceivedfrom: nannuities,alsoknownasnon-superannuation annuities.Theymaybepaidtoyoubylifeinsurance companiesandfriendlysocieties.Youmayhave receivedaPAYG payment summary individuals non-businessshowingsuchamounts nsuperannuation income streams(includinglump suminarrearsamounts).Thesearepaidtoyou byAustraliansuperannuationfunds,retirement savingsaccount(RSA)providersandlifeinsurance companies.YoumayhavereceivedaPAYG payment summary superannuation income streamshowingsuchamounts. IfyoureceivedataxableAustraliansuperannuation lumpsumpayment,includeitatitem8.
Donotshowthefollowingamountsanywhereon yourtaxreturn: nthetaxedelementofasuperannuationincome streamyoureceivedafteryouturned60yearsold (theseamountsaretaxfreeandnotincludedin yourtaxableincome) nthetaxedelementofasuperannuationincome streampaidtoyouastheresultofthedeathof anotherpersonwhodiedat60yearsoldorolder (theseamountsaretaxfreeandnotincludedin yourtaxableincome).

NO YES
ANSWERINg THIS QUESTION Youwillneed: nyourPAYG payment summary individual non-businessshowingthegrosspayment ofanyannuities nyourPAYG payment summary superannuation income stream.Superannuationincomestream benefitshavetwocomponentswhichmaybe shownonyourpaymentsummary ataxablecomponentwhichincludes ataxedelement,and anuntaxedelement atax-freecomponent.Donotshowyourtax-free componentanywhereonyourtaxreturn.
Youmayalsoneedastatementfromyourpayer showingthedeductibleamountoftheundeducted purchaseprice(UPP)oftheannuitysoyoucanwork outtheamounttoincludeasincomeatthisitem.If youhavenotreceivedthisinformationoryouhave lostit,contactyourpayertoobtainacopy. YoumaynothavereceivedaPAYG payment summary superannuation income streambecause yourentiresuperannuationincomestreamwas tax-free.Forexample,youmaynothavereceiveda paymentsummaryifin200910yoursuperannuation incomestreamcontainedonlytaxedelements receivedonorafteryouturned60yearsold.
COMPLETINg YOUR TAX RETURN Step 1: Tax withheld Addupthetaxwithheldamountsonyourpayment summariesforyoursuperannuationincomestreams andannuities.
WritethetotalintheleftcolumnunderTax withheld atitem 7onyourtaxreturn. Step 2: Taxed element of taxable component Addupthetaxed elementamountsthatappear undertheheadingTaxablecomponentonyour superannuationincomestreampaymentsummaries. Donotincludeanygrosspaymentsfromannuities shownonaPAYG payment summary individual non-businessatthisstep.Thesearedealtwithat step4. WritethetotalatJitem7. Step 3: Untaxed element of taxable component Addupanyuntaxed elementamountsthatappear undertheheadingTaxablecomponentonyour superannuationincomestreampaymentsummaries, andwritethetotalat(a)inworksheet 1onthenext page.Ifyoudidnotreceiveany,write0.
TAXPACK 2010
13
7 Australianannuitiesandsuperannuationincomestreams
Step 4: Annuities IfyoudidnotreceiveanyAustralianannuities,write0 at(b)inworksheet 1belowandgotostep5. Ifyoureceivedanannuity,yourpayermay haveprovidedyouwithastatementshowingthe deductible amountoftheUPPofyourannuity.Ifyou donothavedetailsofthedeductibleamount,contact yourpayerforassistance.Ifyourpayercannottell you,phonetheSuperannuationInfoline(seethe insidebackcover). Subtractthedeductibleamountfromthegross amountoftheannuityshownonyourPAYG payment summary individual non-business.
nIftheanswerisanegativeamountthentheamount
Step 6: Taxed element of lump sums in arrears Addupallthetaxed elementamountsthatappear undertheheadingLumpsuminarrearstaxable componentonyoursuperannuationincomestream paymentsummaries. WritethetotalatYitem7. Step 7: Untaxed element of lump sums in arrears Addupalltheuntaxed elementamountsthatappear undertheheadingLumpsuminarrearstaxable componentonyoursuperannuationincomestream paymentsummaries. WritethetotalatZitem7.
istreatedasifitwaszero. nIfyouhadmorethanoneannuity,repeatthisstep foreachone. nAddtheseamountsandwriteyourtotalat(b)in worksheet 1. Step 5: Total untaxed element Add(a)and(b)inworksheet 1. WORKSHEET 1 Working out the total of untaxed elements and annuity amounts Totaluntaxed element amountsfromsuperannuation incomestreams(fromstep3) Totalamountsfrom annuities(fromstep4) Add(a)and(b).
LUMP SUMS IN ARREARS TAX OFFSET Youmaybeentitledtoataxoffsetifyoureceiveda superannuationincomestreamlumpsuminarrears. However,youneedtoprovideadditionalinformation.

nOnaseparatepieceofpaper:
$ $ $
(a) (b) (c)
printSCHEDULEOFADDITIONALINFORMATION ITEM7 printyourname,addressandtaxfilenumber writetheamountofthepaymentinarrearsfor eachincomeyearinvolved.Forexample,ifyou received$900in200910asalumpsumin arrears,$600ofthatlumpsumcouldbedue toyoufor200708and$300for200809.You wouldwrite200708 $600and200809 $300. Ifyoudonothavethatinformation,contactthe payerofyoursuperannuationincomestream. nSignyourscheduleandattachittopage3ofyour taxreturn. nPrintXintheYESboxatTaxpayers declaration question2aonpage12ofyourtaxreturn. TAX TIPS Youmaybeentitledtothe: nseniorAustralianstaxoffsetreadquestionT2 onpages6870formoreinformation nsuperannuationincomestreamtaxoffsetread questionT4onpage72formoreinformation.
Transfertheamountat(c)toNitem7. Ifyoudidnotreceiveanysuperannuationincome streamlumpsumsinarrears,gotoquestion8.
14
TAXPACK 2010
Australian superannuation lump sum payments
Income 8
ThisquestionisaboutAustraliansuperannuation lumpsumpaymentsorsuperannuationdeathbenefit paymentsyoureceived,includingthosepaidby: nsuperannuationfunds napproveddepositfunds nretirementsavingsaccountproviders nlifeinsurancecompanies. Itisalsoaboutany: namountswepaidtoyouinrespectofthe superannuationguaranteechargeorthe superannuationholdingaccountsspecialaccount npaymentsyoureceivedfromtheunclaimed moneyregisters. Donotshowonyourtaxreturnany: ntax-freecomponent(includinganysuper co-contributionpaymentfromus) nlumpsumpaymentsyoureceivedasadeath benefits dependant(seethedefinitionon page124) ntaxedelementofsuperannuationlumpsum paymentyoureceivedonorafteryour60thbirthday unlessitisadeathbenefitsuperannuationlump sumpaymentpaidtoyouasanon-dependant
nsuperannuationlumpsumpaymentreceivedas
thetrusteeofadeceasedestate(thispayment mustbeshownonthetrusttaxreturnofthe deceasedestate) namountsreleasedunderareleaseauthority issuedtoyoubecauseofanexcesscontributions taxassessment namountspaidtoyoubecauseyouhaveaterminal medical condition(seethedefinitiononpage125) astheseamountsaretaxfree. Youneedtocompletethisitemifyoureceiveda PAYG payment summary superannuation lump sumthatshowsataxedoruntaxedelement. Showlumpsumsyoureceivedfromforeign superannuationfundsatitem20onyourtaxreturn (supplementarysection).

NO YES
ANSWERINg THIS QUESTION YouwillneedyourPAYG payment summary superannuation lump sum.

Ifyouhavenotreceivedit,havelostitorthinkthe details(suchasthedependencystatus)onitare wrong,contactyourpayer.Ifyoustillcannotobtain itorcannotagreeonthedetails,moreinformation aboutmakingastatutorydeclarationisavailableon ourwebsiteatwww.ato.gov.au
Step 2 Writethetotalamountoftaxwithheld,asshownonyour paymentsummary,underTax withheldatitem8. Step 3 Did you receive a death benefit lump sum payment when you were not a death benefits dependant of the deceased?
NO YES
Gotostep4. PrintNintheTYPEboxatitem8 onyourtaxreturn.Readbelow.
COMPLETINg YOUR TAX RETURN Ifyoureceivedmorethanonesuperannuationlump sumduringtheyear,gotostep5.Otherwise,readon.

Step 1 Writeintheleftcolumnatitem8thedateofpayment andyourpayersAustralianbusinessnumber(ABN), asshownonyourPAYG payment summary superannuation lump sum.
Step 4 Thetaxedelementanduntaxedelementofyour superannuationlumpsumareonyourpayment summary. WritethetaxedelementamountatQitem8. WritetheuntaxedelementamountatPitem8. Youhavenowfinishedthisquestion.Gotoquestion9.
TAXPACK 2010
15
8 Australiansuperannuationlumpsumpayments
Step 5 Ifyoureceivedtwoormoresuperannuationlump sums,youneedtocompleteaSuperannuation lump sum schedule(NAT71743)usingtheinformation shownonyourpaymentsummaries.Youcanobtain acopyoftheschedulefromourwebsiteorbyphoning theIndividualInfoline(seetheinsidebackcover). Step 6 Whenyouhavecompletedtheschedule,addup thetotaltaxwithheld,taxedelementsanduntaxed elementsfromeachsuperannuationlumpsumyou received,andtransfertheseamountstoitem8on yourtaxreturn. WritethetotaltaxwithheldintheTax withheld column. WritethetotaltaxedelementsatQandthetotal untaxedelementsatP.PrintthecodeletterMin theTYPEbox. DonotwriteanydateofpaymentorpayersABN onyourtaxreturn.
Step 7 Attachyourscheduletopage3ofyourtaxreturn andprintXintheYESboxatTaxpayers declaration question2aonpage12ofyourtaxreturn.
MORE INFORMATION FormoreinformationaboutAustraliansuperannuation lumpsums,gotoourwebsiteatwww.ato.gov.au andenterHowyoursuperpayoutistaxed or Understandingadeathbenefitpaidfromasuper fundintheSearchforboxatthetopofthepage.
16
TAXPACK 2010
Attributed personal services income
Income 9
Youmustcompletethisitemifyouprovidedpersonal servicesandyou: nreceivedaPAYG payment summary business and personal services income(NAT72545)showingan XagainstPersonalservicesattributedincome,or nhadpersonalservicesincomeattributedtoyou. Ifyouprovidedpersonalservicesandpaymentwas madetoyouasasoletrader,donotcompletethis item.Youmustanswerquestion14inTaxPack 2010 supplement andcompleteitemP1intheBusiness and professional items schedule for individuals 2010 (NAT2816). Personalservicesincomeisincomethatismainly arewardforyourpersonaleffortsorskillsandis generallypaideithertoyouortoapersonalservices entity(acompany,partnershiportrust).
Ifyourpersonalservicesincomeispaidtoapersonal servicesentity,theincome(lesscertaindeductions relatingtogainingorproducingthatincome)maybe attributedtoyouunless: nthepersonalservicesentitygainedtheincome inthecourseofconductingapersonalservices business,or ntheincomewaspromptlypaidtoyoubytheentity assalary.
Did you receive any attributed personal services income?

NO YES
ANSWERINg THIS QUESTION Youwillneed: nyourPAYG payment summary business and personal services incomeshowingtheamountof personalservicesincomeattributedtoyouandthe totalamountoftaxpaidorwithheld ndetailsofanyotherpersonalservicesincome attributedtoyou.
Ifyoudonothaveallofyourdocuments,contact thepersonwhopaidyou.
TAX TIPS Ifthepersonalservicesentityhasanetloss relatingtoyourpersonalservicesincome,no amountisattributedtoyou.However,youshould readquestionD16inTaxPack 2010 supplement toclaimadeductionfortheloss.
COMPLETINg YOUR TAX RETURN Step 1 Writethetotalamountoftaxwithheldfromthe personalservicesincomeattributedtoyouunder Tax withheldattheleftofOitem9.

Step 2 Writethetotalamountofpersonalservicesincome attributedtoyouatOitem9.
MORE INFORMATION Youcanfindanexplanationoftherulesrelatingto theattributionofpersonalservicesincomeinTaxation Ruling TR 2003/6: Income tax attribution of personal services income.
TAXPACK 2010
17
Total tax withheld
COMPLETINg YOUR TAX RETURN Step 1 AddupalltheamountsintheTax withheldcolumn atitems1to9onpage2ofyourtaxreturn.

Step 2 WritethetotalamountatTOTAL TAX WITHHELD.
HELPFUL HINTS Tax offsets and tax withheld Ifyourtaxoffsetshavechangedsinceyoulast filledinaWithholding declaration(NAT3093), youneedtocompleteanewdeclaration. Other amounts withheld Ifyouhavetolodgeactivitystatements: n makesureyoulodgeallyouractivitystatements beforeyoulodgeyourtaxreturn n donotshowpayasyougo(PAYG)instalments anywhereonyourtaxreturn.Theseare automaticallycreditedtoyouinyourassessment.
18
TAXPACK 2010
Gross interest
Income 10
Thisquestionisaboutinterestpaidorcreditedto youfromanysourceinAustralia,includingaccounts andtermdepositsheldwithfinancialinstitutionsin Australia.Thisincludes: ninterestwepaidorcreditedtoyou ninterestfromchildrensaccountsyouopenedor operatedwithfundsthatbelongedtoyouorfunds thatyouusedasiftheybelongedtoyou.Formore informationaboutchildrensaccounts,seeTaxation Ruling IT 2486 Income tax: childrens savings accountsonourwebsite.
RefertoTaxPack 2010 supplementifyouhaveany ofthetypesofinterestlistedbelow: ndistributionsofinterestyoureceived,orwere entitledtoreceive,fromapartnershiportrust (includingacashmanagementtrust,propertytrust, unittrustorothersimilartrustinvestmentproduct) seequestion13 ninterestfromaforeignsourceseequestion19 ninterestfromthelandtransportfacilitiestaxoffset schemeorinfrastructureborrowingsscheme seequestion24.
Was any interest paid or credited to you from any source in Australia?
NO YES
ANSWERINg THIS QUESTION Youwillneed: nyourstatements,passbooksandother documentationfromyourfinancialinstitutionsand othersourcesthatshow200910interestincome nanynoticeofassessmentoramendedassessment youreceivedfromusduring200910thatshows interestonearlypaymentsorintereston overpayments.
Taxfilenumber(TFN)amountsareamountsoftax withheldbyfinancialinstitutionsbecauseyoudid notprovideyourTFNorAustralianbusinessnumber (ABN)tothem.TFNamountsareshownonyour statementordocumentasCommonwealthtax orTFNwithholdingtax.Theseamountsmustbe includedasgrossinterestonyourtaxreturn. Donotincludeanyinterestcreditedtoafirsthome saveraccount,orincludedaspartofapaymentto youfromsuchanaccount,atthisitemoranywhere elseonyourtaxreturn. Ifyouwereanon-residentwhenyoureceivedor werecreditedwiththeinterest,seepage117for informationaboutnon-residentwithholdingtaxon theseamounts.
Ifyouhadanyjointaccounts,showonlyyourshare oftheinterest.Thiswillbehalfifyouheldtheaccount equallywithoneotherperson.Keeparecordofhow youworkedoutyourproportionifyouandtheother accountholdersdidnotsharetheamountsof interestequally.
COMPLETINg YOUR TAX RETURN Step 1 Adduptheamountsofgrossinterestyoureceived in200910.

Step 2 Writethetotalamountofyourgrossinterestat Litem10.Donotshowcents.Ifthetotalwasless than$1,donotwriteanything. Step 3 AddupallyourTFNamountsbutdonotincludeany whichhavealreadybeenrefundedtoyou,asshown onyourstatements.WritethetotalatMitem10. Showcents.
TAXPACK 2010
19
11 Income
Dividends
Thisquestionisaboutdividendsanddistributionsthat werepaidorcreditedtoyoubyAustraliancompanies thatyouhadsharesin.Theseinclude: ndividendsappliedunderadividendreinvestment plan ndividendsthatweredealtwithonyourbehalf nbonussharesthatqualifyasdividends. Yourdividendstatementswillshowtheamounts andshouldshowthepaymentdates. Dividendsinclude: ndistributionsbyacorporatelimitedpartnership ndividendspaidbyacorporateunittrust ndividendspaidbyapublictradingtrust ndividendspaidbyalistedinvestmentcompany. Thefollowingmayalsobeincludedasdividends: nearningsyoureceived,orwerecreditedwith,on anon-shareequityinterest namountsyoureceivedfrom,orwerecredited by,aprivatecompanyasashareholderoran associateofashareholderintheformofpayments, loansordebtsforgiven(thesearegenerally unfrankeddividends)
namountsyoureceivedfrom,orwerecredited
by,thetrusteeofatrustestateintheformof payments,loansordebtsforgivenwhereaprivate companyinwhichyouwereashareholder,or anassociateofashareholder,hadanunpaid presententitlement(orwasgoingtohavesuch anentitlementbyacertaintime)fromthetrust (thesearegenerallyunfrankeddividends).
Donotincludedividendspaidunderademerger unlessthecompanyadvisedyoutoincludethem. Ifyoureceived,orwerecreditedwith,adividend whenyouwerenotanAustralianresident,see page117.
Were you paid or credited with any dividends by Australian companies?

NO YES
ANSWERINg THIS QUESTION YouwillneedyourstatementsfromeachAustralian company,corporatelimitedpartnership,corporate unittrust,publictradingtrustandlistedinvestment companythatpaidyoudividendsormadedistributions toyoubetween1July2009and30June2010.

Statementsmayshow: namountsoffrankedandunfrankeddividends namountsoffrankingcredits ntaxfilenumber(TFN)amountswithheldfrom unfrankeddividends. Frankingcreditsareamountsoftaxpaidbythe companythatareallocatedtoyourdividendor distribution.Youincludeasassessableincomeboth theamountofyourdividendordistributionandthe amountofthefrankingcreditsallocatedtoyou.You alsoreceiveataxcreditonyourtaxassessmentfor anamountequaltothefrankingcredits.
Ifwithin45daysofbuyingtheshares(90daysfor certainpreferenceshares),youeithersoldthemor enteredintoanarrangementtoreducetheriskof makingalossonthem,youmaynotbeentitledto claimthefrankingcredits.Additionally,ifyouwere underanobligationtomake,orwerelikelytomake, arelatedpayment,youmaynotbeentitledtoclaim thefrankingcredits.SeeHolding period rule and Related payments ruleonpages11819formore information. TFNamountsareamountsoftaxwithheldfrom dividendsandsomedistributionsbyinvestment bodiesbecauseyoudidnotprovideyourTFNor ABNtothem.TFNamountsareshownonyour dividendstatement.Theseamountsmustbe includedintheamountofunfrankeddividends youwriteonyourtaxreturn.
20
TAXPACK 2010
Dividends 11
Ifyouhadanysharesinjointnames,showonlyyour proportionofthedividends.Thiswouldbehalfifyou heldthesharesequallywithoneotherperson.Keep arecordofhowyouworkedoutyourproportionif youandtheotherjointownersdidnotownthe sharesequally.
TAX TIPS RefertoTaxPack 2010 supplementifanyofthe followingapplytoyou: nyoureceivedadistributionfromapartnership ortrustseequestion13 nyoucarriedonabusinessoftradinginshares seequestion15 nyousold,redeemed,cancelledorotherwise disposedofsharesduringtheyear(butdid notcarryonabusinessoftradinginshares) seequestion18 nyoureceiveddividendsfromaforeigncompany seequestion20 naNewZealandcompanypaidyouadividend withAustralianfrankingcreditsattachedsee question20 nyoureceiveddividendsoradistributionon whichfamilytrustdistributiontaxhadbeen paidseequestionA4.
COMPLETINg YOUR TAX RETURN Ifanyofyourstatementsdonotshowfrankedand unfrankedportionsofthedividend,includethetotal dividendamountatTitem11whenyoucomplete step2.

Step 1 Addupalltheunfrankeddividendamounts fromyourstatements,includinganyTFNamounts withheld.Alsoincludeanyotheramountsthatare treatedasdividends. WritethetotalamountatSitem11. Step 2 Addupallthefrankeddividendamountsfromyour statements,andanyotherfrankeddividendspaid orcreditedtoyou. WritethetotalamountatTitem11. Step 3 Addupthefrankingcreditamountsthatyouare entitledtoclaimshownonyourstatements.Do notincludethemiftheholding period ruleor related payments rulepreventsyoufromclaiming them.Seepages1189formoreinformation. WritethetotalamountatUitem11. Step 4 AddupanyTFNamountswithheldthathavenot beenrefundedtoyou. WritethetotalamountatVitem11.Showcents. Keepyourdividendstatements.Moreinformation onrecordkeepingisavailableonourwebsite atwww.ato.gov.au
MORE INFORMATION Formoreinformationaboutshares,dividendsand amountstreatedasdividends,seeYou and your shares 2010(NAT2632).

Forinformationaboutcapitalgainstax,seeGuide to capital gains tax 2010(NAT4151).
TAXPACK 2010
21
12 Income
Employee share schemes

THIS IS A NEW QUESTION.
Thisquestionisaboutdiscountsonemployeeshare schemeinterests(ESSinterests)thatyoureceived underanemployeesharescheme.ESSinterestsare: nshares nstapledsecurities(providedatleastoneofthe stapledinterestisashareinacompany) nrightstoacquiresharesandstapledsecurities. TheESSinterestscanbe: nfromanAustraliancompanyoraforeigncompany nrelatedtoyouremploymentinsideoroutside Australia. Youwillbetaxedonthediscountintheyearinwhich youacquiredtheESSinterest.Thisisknownasa taxedupfrontscheme.However,ifthescheme meetscertainconditionsthetaxingpointisdeferred untilalatertime.Theseschemesareknownas deferralschemes. Formoreinformation,seetheEmployees guide to employee share schemes onourwebsiteat www.ato.gov.au
Youcannolongerchoosewhentobetaxedonthe discountyoureceiveonESSinterests.The conditionsoftheschemeinwhichyouparticipate determinewhenyoupaytaxonthediscountyou receive. Insomecircumstances,youmaybeentitledto reducetheamountofthediscountsreceivedunder taxedupfrontschemesbyupto$1,000.Youmay qualifyforthereductionifthesumofthefollowing amountsis$180,000orless: nyourtaxableincomefortheyear(calculatedas thoughyouarenotentitledtothe$1,000reduction) nyourreportableemployersuperannuation contributions(TitemIT2) nyourtotalreportablefringebenefitsamounts (WitemIT1) nyournetfinancialinvestmentloss(XitemIT5) nyournetrentalpropertyloss(YitemIT6) nyourdeductiblepersonalsuperannuation contributions(HitemD13). Formoreinformation,seeourelectronicpublication Employees guide to employee share schemes. Therulesoftheschemeoraletterfromyour employershouldadviseyouwhetheryouhave acquiredESSinterestsunderataxedupfrontor deferralscheme.Youremployerwillprovideyou withanannualemployeesummarywhichwillshow youthevalueofanydiscountsyouhavereceivedon yourESSinterests.Youwillneedthissummaryto completethisitem.
Did you receive a discount on ESS interests you acquired under a taxed upfront scheme? Did a deferred taxing point occur in respect of ESS interests you acquired at discount under a deferral scheme? Did a cessation time occur during the 200910 income year in relation to shares, stapled securities or rights you acquired before July 2009 under an employee share scheme and you had not elect to be taxed upfront on the discount on those shares etc?
NO
Ifyouanswerednotoallthreequestions, gotoIncome that you show on the supplementary section of the tax return. Ifyouansweredyestoanyquestion, readon.
YES
ANSWERINg THIS QUESTION YouwillneedyourEmployee share scheme: employee summary fromeachemployerwithwhom youparticipatedinanemployeesharescheme.Each summaryshowstheamountofyourdiscountand whetheryourdiscountwasfrom:
nataxedupfrontschemeeligibleforreduction nataxedupfrontschemenoteligibleforreduction ndeferralschemes,or napre-1July2009schemeandacessationtime
occurredduringtheincomeyear.
22
TAXPACK 2010
Employeeshareschemes 12
ItwillalsoshowtheamountofyourESSdiscounts thathadaforeignsource. Youremployeesummariesmayalsoshow: nthenumberofinterestsyouacquired ntheconsiderationyouprovidedforacquiringthe interests nthemarketvalueoftheESSinterestsyoureceived, and ntheamountoftaxwithheld(TFNamount)ifyoudid notprovideyourtaxfilenumber(TFN)orAustralian businessnumber(ABN)toyouremployer. Ifyoudonothaveallyouremployeesummariesor comparablestatements,contactyouremployer.If youareunsuccessfulinobtaininganyofthese,more informationaboutmakingastatutorydeclarationis availableonourwebsiteatwww.ato.gov.au IfanassociatehasacquiredanESSinterestasa resultofyouremployment,youmustincludethe discountinyourassessableincome.Yourassociates willnotneedtoincludethediscountontheirincome taxreturn. Ifyouqualifyasatemporaryresidentspecialrules mayapplyifyouacquiredshares,stapledsecurities orrightsunderpre-1July2009employeeshare schemeorESSinterestsunderanemployeeshare scheme.SeeEmployees guide to employee share schemes. IfyoudisposedofyourESSinterestsbecauseof acorporaterestructureortakeoverandreceived replacementshares,stapledsecuritiesorrights, specialprovisionsmayapply.Seetheelectronic publicationEmployee share schemes rollover relief onourwebsiteatwww.ato.gov.au
WritethetotalamountatDitem12. Step 2 Addupallthediscountamountsfromyouremployee summariesthatarefromtaxedupfrontschemesnot eligibleforreduction. WritethetotalamountatEitem12. Step 3 Addupallthediscountamountsfromyouremployee summariesthatarefromdeferralschemesandfor whichadeferredtaxingpointoccurredduringthe incomeyear. WritethetotalamountatFitem12. Step 4 Youmustshowtherelevantdiscountatthisitem. WritethetotalamountofthesediscountsatG item12. Ifyouacquiredemployeeshareschemeinterests before1July2009and: nyoudidnotmakeanelectiontobetaxedupfront atthetimeyoureceivedthem,and nacessationtimeoccurredduring200910. Ifthediscountamountisnotonthesummary,contact youremployerorrefertoourpublicationEmployees guide to employee share schemes onourwebsiteat www.ato.gov.au Step 5 IfyoudidnotwriteanamountatD,gotostep6. IfyouwroteanamountatD,youmaybeentitledto areductionofupto$1,000ontheamountthatyou areassessedon.Todetermineyoureligibilityyouwill firstneedtoworkoutifyousatisfytheincometest. Calculateyourtaxableincome(asifyouarenot entitledtothisreduction). Addyourtaxableincometothefollowingamounts (whichyoumustcompleteatIncome tests on page8ofyourtaxreturn;seepages1016in TaxPack 2010): nyourreportableemployersuperannuation contributions(TitemIT2) nyourtotalreportablefringebenefitsamounts (WitemIT1) nyournetfinancialinvestmentlosses(XitemIT5) nyournetrentalpropertylosses(YitemIT6) nyourdeductiblepersonalsuperannuation contributions(HitemD13).
23
COMPLETINg YOUR TAX RETURN Forthepurposesofsteps1to3,employee summaryincludescomparablestatementsand statutorydeclarations.

Ifadiscountyouhavereceivedisfromaforeign sourceanditisexemptincome,whichyouworkout bygoingthroughsteps1to4inpartAofquestion20 inTaxPack 2010 supplement,thenyoudonotinclude thediscountatthisitemoranywhereelseonyour taxreturn. Step 1 Addupallthediscountamountsfromyouremployee summariesthatarefromtaxedupfrontschemes eligibleforreduction.
TAXPACK 2010
12 Employeeshareschemes
Iftheamountthatyoucalculatedwasgreaterthan $180,000,youdonotsatisfytheincometestandare notentitledtoareduction.Adduptheamountsthat youwroteatD,E,FandG.WritethetotalatB. Iftheamountthatyoucalculatedwaslessthanor equalto$180,000,yousatisfytheincometestand areeligibleforthereductionofupto$1,000: niftheamountatDislessthanorequalto$1,000, adduptheamountsthatyouwroteatE,FandG andwritethetotalatB,or niftheamountatDisgreaterthan$1,000,addup theamountsatD,E,FandGthentake$1,000 awayfromthetotal.WritetheresultingamountatB. Gotostep7. Step 6 AdduptheamountsthatyouwroteatE,FandG. WritethetotalatB. Step 7 AddupalltheTFNamountswithheldfromdiscounts fromyouremployeesummariesandwritethesum atC. Step 8 Ifyoudidnotpayforeignincometaxinrespectofany discountsyoureceivedonESSinterestsyouhave finishedthisquestion;gotoIncome that you show on the supplementary section of the tax return. Otherwise,readon. Youmaybeentitledtoclaimaforeignincometax offsetfordiscountsifyouhavepaidforeignincome taxinrespectofthediscounts. AtA,showthetotalamountofyourdiscountsfrom ESSinterestsforwhichyouareclaimingaforeign incometaxoffset. Toclaimaforeignincometaxoffset,youmust completeOitem20onyourincometaxreturn. Forinformationonhowtocalculateaforeign incometaxoffsetyouwillneedtoreadourelectronic publicationGuide to foreign income tax offset rules onourwebsiteatwww.ato.gov.au
Ifyouhavepaidforeigntaxinrespectofdiscounts onESSinterestsincludedinyourassessableincome inapriorincomeyear,youmaybeentitledtoforeign incometaxoffsetforthatincomeyear.Toclaimthis taxoffset,youneedtorequestanamendmentto yourtaxreturnforthatincomeyear.Seepage127 onhowtorequestanamendmenttoyourprioryear taxreturn.
MORE INFORMATION Formoreinformationaboutemployeeshare schemes,seeourelectronicpublicationEmployees guide to employee share schemes onourwebsite atwww.ato.gov.au
HELPFUL HINTS Donotattachyouremployeesummariestoyour taxreturn.Makesureyoukeepyoursummaries foratleastfiveyearsafteryouareassessedon yourdiscounts.
24
TAXPACK 2010
Income that you show on the supplementary section of the tax return
Income I
YouneedtouseTaxPack 2010 supplementifyouhad anyofthefollowingtypesofincomeorlosses.
nOtherincomenotshownatitems1
to 12
TYPES OF INCOME nPartnershipandtrustdistributions nPersonalservicesincome(otherthansalaryand wageincome)* nIncomefromabusiness(includingonewhere youwereself-employed) nIncomeunderapayasyougo(PAYG)voluntary agreement nIncomefromwhichanamountwaswithheldbecause youdidnotquoteyourAustralianbusinessnumber nIncomereceivedasanindependentcontractor underalabourhirearrangement nIncomeyouearnedasanon-employeetaxidriver forexample,adriveroperatingunderastandard bailmentagreementwithanowner-operator nIncomefromwhichanamountwaswithhelddueto theoperationofforeignresidentwithholding nIncomeyoudepositedintoafarmmanagement account nIncomeyouwithdrewfromafarmmanagement account nAcapitalgainforexample,ondisposalofacapital gainstax(CGT)asset nAdistributionfromaforeignentity nIncomeattributedtoyoufromacontrolledforeign company,foreigninvestmentfund,foreignlifepolicy oratransferortrust(foreignincome) nIncomeshownonaforeignemploymentpayment summary nAnyotherforeignemploymentincome nIncomereceivedfromaforeignsource,including foreignpensionsandforeigndividendsfor example,NewZealanddividendswithAustralian frankingcredits** nRent nBonusesfromlifeinsurancecompaniesandfriendly societies nForestrymanagedinvestmentschemeincome n Gainsfromfinancialarrangementscalculatedunder thetaxationoffinancialarrangements(TOFA)rules
*Personalservicesincomeincludesthefollowingpayments specifiedbyregulation(specifiedpayments): incomeasaperformingartistinapromotionalactivity paymentfortutorialservicesprovidedfortheIndigenous TutorialAssistanceSchemeoftheDepartmentofEducation, EmploymentandWorkplaceRelations paymentfortranslationandinterpretationservicesforthe TranslatingandInterpretingServiceoftheDepartmentof ImmigrationandCitizenship.
Otherincomeincludes: nanamountreleasedbyoneormoreofyour superannuationfundsgreaterthantheexcess contributionstaxliabilitystatedontherelease authority.Thereleaseauthorityissenttoyouwiththe noticeofassessmentforexcesscontributionstax nlumpsumpaymentsinarrears(exceptthoserelating tosuperannuationyoushowtheseatitem7) njuryattendancefees nforeignexchangegains nroyalties nbonusamountsdistributedfromfriendlysociety incomebonds ntaxablescholarships,bursaries,grantsandother educationalawards nbenefitsandprizesfrominvestment-related lotteriesandsomegame-showwinnings nincomefromyouractivitiesasaspecialprofessional, suchasauthorofaliterary,dramatic,musicalor artisticwork;aninventor;aperformingartist;a productionassociateoranactivesportsperson nreimbursementsoftax-relatedexpensesorelection expenseswhichyouhaveclaimedasadeduction nanassessablebalancingadjustmentfromthe disposal,lossordestructionofanydepreciating asset,includingyourcar,forwhichyouhave claimedadeductionfordeclineinvalue npaymentsfromsicknessandaccidentinsurance policiesotherthanthoseshownonyourpayment summary ninterestfromthelandtransportfacilitiestaxoffset schemeorinfrastructureborrowings ngainsfromthedisposalorredemptionoftraditional securities nallowancesorpaymentsyoureceivedasamember ofalocalgovernmentcouncilthatyouhavenot alreadyshownatitem1or2 nothertaxableallowancesorpaymentsyoureceived fromCentrelinkthatarenotshownatitem5or6 nwork-in-progressamountsyoureceivedandhave notshownatitem15.
**Youmustalsocompletethesupplementarysectionofthe taxreturnif: youownforeignassets(includinganinterestinaforeign lifepolicyorforeigncompanyortrust,orshares) youhaveeverdirectlyorindirectlycausedthetransferof property(includingmoney)orservicestoanon-resident trustestate.
TAXPACK 2010
25
I Incomethatyoushowonthesupplementarysectionofthetaxreturn
Types of losses nAbusinessloss(includingonewhenyouwere self-employed) nAdeferrednon-commercialbusinessloss nAcapitallossforexample,ondisposalofaCGTasset nNon-capitallossfromthedisposalorredemptionof traditionalsecurities
Did you have any of these types of income or losses?

NO YES
GotoTotal income or loss. Readbelow.
ANSWERING THIS QUESTION YoucanfindtheTax return for individuals (supplementary section) 2010atthebackof TaxPack 2010 supplement.Ifyoudonthavea copyofthissupplement,youcangetonefrommost newsagentsduringthelodgmentperiod(1Julyto 31October2010).Copiesarealsoavailableallyear fromourPublicationsDistributionService(seethe insidebackcover)andshopfronts.
Ifyouhadabusinessorpersonalservicesincome, ordeferrednon-commerciallosses,youwillneedto readthepublicationBusiness and professional items 2010(NAT2543)thencompletetheBusiness and professional items schedule for individuals 2010 (NAT2816)andattachittopage3ofyourtaxreturn.
COmplETING YOUR TAx RETURN Aftercompletingalldetailsthatarerelevanttoyour circumstancesontheTax return for individuals (supplementary section) 2010,transferthe TOTAL SUPPLEMENT INCOME OR LOSSamounton page15toitemIonpage3ofyourTax return for individuals 2010.Ifitisaloss,printLintheLOSS boxbesideit.
HElpFUl HINTS Ifyouwere55yearsoldorolderon30June2010, youmaybeentitledtothematureageworker taxoffset.Certainincomefromthesupplementary sectionwillbeusedtocalculateyournetincome fromworking.SeequestionT12 Net income from working supplementary sectionin TaxPack 2010 supplementforfurtherinformation.
Income
Total income or loss
COmplETING YOUR TAx RETURN GotoTOTAL INCOME OR LOSSonpage3of yourtaxreturn.

Step 1 Checkthatyouhaveshownallyourincome. Step 2 Addupalltheamountsintheright-handcolumn ofitems1to12onpages23ofyourtaxreturn.
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Step 3 Ifbelowitem12onyourtaxreturnyouhaveno amountatIgotostep4,otherwisereadon.Ifthe amountatIisalossyoutakeitawayfromyourtotal fromstep2,otherwiseaddtheamountatItoyour totalfromstep2. Step 4 WriteyouransweratTOTAL INCOME OR LOSS. Ifyouranswerisaloss,printLintheLOSSboxat therightofTOTAL INCOME OR LOSS.
TAXPACK 2010
Claiming deductions
Youmaybeabletoclaimdeductionsforwork-related expensesyouincurwhileperformingyourjobasan employee.Youincuranexpenseinanincomeyearwhen: nyoureceiveabillorinvoiceforanexpensethatyou areliableforandmustpay(evenifyoudontpayit untilaftertheendoftheincomeyear),or nyoudonotreceiveabillorinvoicebutyouare chargedandyoupayfortheexpense. Theseexpensesinclude: ncarexpenses,includingfuelcostsandmaintenance ntravelcosts nclothingexpenses neducationexpenses nunionfees nhomecomputerandphoneexpenses ntoolsandequipmentexpenses njournalsandtrademagazines. Youmayalsobeabletoclaimsomedeductions whicharenot work related.Theyare: ninterestanddividenddeductionsforinvestments ndeductionsforgiftsanddonations nadeductionforthecostofmanagingyourtaxaffairs. Formoreinformationandexamplesexplainingthe meaningofincurred,refertoTaxation Ruling TR 97/7 Income tax: section 8-1 meaning of incurred timing of deductions.Thispublicationisavailableon ourwebsite.Seetheinsidebackcovertofindout howtoobtainaprintedcopy.
bASIC RULES Youmusthaveincurredtheexpensein200910. Theexpensemustnotbeprivate,domesticorcapital innature.Forexample,thecostsofnormaltravelto andfromwork,andbuyingluncheachdayareprivate expenses.Ifyouincurredanexpensethatwasboth workrelatedandprivateordomesticinnature,you canclaimadeductiononlyforthework-related portionoftheexpense. Ifyouincurredanexpensethatwascapitalinnatureyou maybeabletoclaimadeductionforthedeclineinvalue ofthedepreciatingassetsyouacquired.SeeDecline in value of a depreciating assetonthenextpage. Ifyouincurredanexpenseforservicespaidinadvance, readAdvance expenditureonthenextpagetodecide whatpartoftheexpenseisdeductiblein200910. Youcannotclaimadeductionforanexpensetothe extentthat: nsomeoneelsepaidtheexpense,oryouwere,or willbe,reimbursedfortheexpense,and nthepaymentorreimbursementisafringebenefit (includinganexemptbenefit). RECORD KEEPINg FOR WORK-RELATED EXPENSES Youmustbeabletosubstantiateyourclaimsfor deductionswithwrittenevidenceifthetotalamount ofdeductionsyouareclaimingisgreaterthan$300. Therecordsyoukeepmustprovethetotalamount, notjusttheamountover$300. Ifthetotalamountyouareclaimingis$300orless, youneedtobeabletoshowhowyouworkedout yourclaims,butyoudonotneedwrittenevidence. Moreinformationonwrittenevidenceisavailableon ourwebsiteatwww.ato.gov.au ADVANCE EXPENDITURE Ifyouhaveprepaidanamountforaservicecosting $1,000ormore,andtheserviceextendsforaperiodof morethan12monthsorbeyond30June2011(suchas asubscriptiontoajournalrelatingtoyourprofession), youcanclaimonlytheportionthatrelatestothe200910 incomeyear.Youcanalsoclaimtheproportionofyour pre-paidexpensesfromapreviousyearthatrelateto the200910incomeyear.Formoreinformation,see Deductions for prepaid expenses 2010(NAT4170). ALLOWANCES Ifyoureceivedanallowancethatyoushowed atitem2onyourtaxreturn,youmaybeable toclaimadeductionforyourexpensescovered bytheallowancebutonlytotheextentthatyou
27
gOODS AND SERVICES TAX Ifyourexpenseincludesanamountofgoods andservicestax(GST),theGSTispartofthetotal expenseandisthereforepartofanydeduction.For example,ifyouincurredunionfeesof$440which included$40GST,youclaimadeductionfor$440. FOREIgN EMPLOYMENT PAYMENT SUMMARY IfyoureceivedaPAYG payment summary foreign employmentthenanydeductionsthatyouareentitled toclaiminrespectoftheincomeshownonthat paymentsummarymustbeclaimedatitemsD1 toD6,whererelevant. Allforeigndeductionsmustbetranslated(converted) toAustraliandollarsbeforeyoucompletethisitem. Moreinformationonhowtotranslateyourforeign deductionsisavailableonourwebsiteoryoucan phonetheIndividualInfoline(seeinsidebackcover) togetinformationabouttheexchangerates.
TAXPACK 2010
Claimingdeductions
actuallyincurredthoseexpensesinproducingyour employmentincomeandthebasicrulesdiscussed onthepreviouspagearesatisfied.Forexample,if youreceivedatoolsallowanceof$500andyourtool expenseswere$300,youincludethewholeamount oftheallowanceatitem2onyourtaxreturnand claimadeductionof$300atitemD5.
nfromyournormalworkplacetoanalternative
workplacewhileyouarestillondutyandback toyournormalworkplaceordirectlyhome nfromyourhometoanalternativeworkplaceand thentoyournormalworkplaceordirectlyhome (forexample,ifyoutraveltoaclientspremises toworktherefortheday). Ifthetravelwaspartlyprivate,youcanclaimonly thework-relatedpart. Youcannotclaimnormaltripsbetweenyourhome andyourworkplace,evenif: nyoudidminorwork-relatedtasksathomeor betweenhomeandyourworkplace nyoutravelledbetweenyourhomeandworkplace morethanonceaday nyouwereoncall ntherewasnopublictransportnearwork nyouworkedoutsidenormalbusinesshours nyourhomewasaplacewhereyouranyourown businessandyoutravelleddirectlytoaplaceof employmentwhereyouworkedforsomebodyelse. CompleteitemD1forwork-relatedexpensesfora caryouowned,leasedorhiredunderahirepurchase agreement(andtheexpenseisnotatravelexpense whichyoushowatitemD2). CompleteitemD2forthefollowingwork-relatedcar andtravelexpenses: nexpensesforvehicleswithacarryingcapacityof onetonneormore,ornineormorepassengers (forexample,utilitytrucksandpanelvans) nexpensesformotorcycles nshort-termcarhire npublictransportfares nbridgeandroadtolls nparkingfees ntaxifares npetrol,oilandrepaircostsrelatingtowork-related travelyoudidinacarownedorleasedby someoneelse nmeal,accommodationandincidentalexpenses youincurredwhileawayovernightforwork.
DECLINE IN VALUE OF A DEPRECIATINg ASSET Youmaybeabletoclaimadeductionforthedecline invalueofadepreciatingassetwhichyouheldduring the200910yeartotheextentthatyouuseditto produceincomethatyoushowonyourtaxreturn. Adepreciatingassetisanassetthathasalimited effectivelifeandcanreasonablybeexpectedto declineinvalueoverthetimeitisused.Depreciating assetsincludeitemssuchastools,referencebooks, computersandofficefurniture. Thedeclineinvalueofadepreciatingassetisworked outonthebasisofitseffectivelife.Youmayeither makeyourownestimatesofitseffectivelifeoruse theCommissionerseffectivelifedeterminations(see Taxation Ruling TR 2009/4 Income tax: effective life of depreciating assetsforassistancewithboth). Youmaybeabletoclaimanimmediatededuction forthefullcostofdepreciatingassetscosting$300 orlessprovidedcertainconditionsaremet.Formore information,seetheGuide to depreciating assets 2010. Thispublicationisavailableonourwebsite.Seetheinside backcovertofindouthowtoobtainaprintedcopy. CAR AND TRAVEL EXPENSES Work-relatedcarexpensesandwork-relatedtravel expensesareexpensesyouincurinthecourseof performingyourjobasanemployee.Youclaim deductionsforthematitemsD1andD2. Thedeductionsincludethecostoftripsbetween yourhomeandyourworkplaceif: nyouusedyourcarbecauseyouhadtocarrybulky toolsorequipmentthatyouusedforworkand couldnotleaveatyourworkplace(forexample, anextensionladderorcello) nyourhomewasabaseofemploymentyoustarted yourworkathomeandtravelledtoaworkplaceto continueyourworkforthesameemployer nyouhadshiftingplacesofemploymentyou regularlyworkedatmorethanonesiteeachday beforereturninghome.
Work-relatedcarandtravelexpensesalsoinclude thecostoftrips: nbetweentwoseparateplacesofemployment (forexample,whenyouhaveasecondjob)
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Award transport payments Ifyoureceivedanawardtransportpayment thatwaspaidunderanindustriallaworaward inforceon29October1986,gotoourwebsiteat www.ato.gov.auandenterClaimingadeduction forcarexpensesawardtransportpaymentsinthe Searchforboxatthetopofthepageforinformation onhowtoclaimit.
TAXPACK 2010
Work-related car expenses
Deductions D1
Forinformationaboutwhatexpensesyouclaimas carexpenses(itemD1)andwhatexpensesyouclaim astravelexpenses(itemD2),andsomeexamplesof tripsyoucanandcannotclaim,seeCar and travel expensesonthepreviouspage. Thisquestionisaboutwork-relatedexpensesyou incurredasanemployeeforacaryou: nowned(evenifitisnotregisteredinyourname) nleased(evenifitisnotregisteredinyourname),or nhiredunderahire-purchaseagreement.
Did you have any of these work-related car expenses?

NO YES
GotoquestionD2. Readbelow.
ANSWERINg THIS QUESTION Youmayneed: nwrittenevidenceforyourcarexpensesreceipts, invoicesordiaryentries nyourcarlogbookandodometerrecords.

Youcanchooseoneoffourmethodstoworkout yourcarexpenses.Ifyouqualifytousemorethan onemethod,youcanusewhichevergivesyouthe largestdeductionorismostconvenient.These methodsare: ncentsperkilometre n12%oforiginalvalue none-thirdofactualexpenses nlogbook. Theyaresummarisedonthefollowingpages. Youmusthavethenecessaryevidenceforthe methodyouchoose. Eachmethodrequiresyoutoknoworestimateyour businesskilometres.Businesskilometresarethe kilometresyoutravelledinthecarinthecourseof earningassessableincome(includeswork-related activities).Forsomeexamplesoftripsyoucanand cannotclaim,seeCar and travel expensesonthe previouspage. Wealsohaveonlinecalculatorstoassistyou. Gotowww.ato.gov.au/calculatorsandselect thework-relatedexpensesoption. Ifyoureceivedassessableincomefromyourwork asanemployeeoutsideAustralia,includingany assessableforeignemploymentincomeshownon yourPAYG payment summary foreign employment, youcanclaimanywork-relatedcarexpensesyou incurredinearningthatincomeatthisitem.
TAXPACK 2010
Deductions for decline in value (depreciation) Youcanclaimadeductionforthedeclineinvalue ofthecaronlyifyouowneditorhireditundera hire-purchaseagreementandyoumustuseeitherthe one-thirdofactualexpensesorthelogbookmethod.

Ifyouleasedaluxurycar,seeSpecial circumstances and glossaryonpage119formoreinformation. Remember:
nThecarstartstodeclineinvaluefromthedayyou
firstuseitevenifyoudontbeginusingitforwork untilalatertime. nYoucanclaimadeductiononlyforayearinwhich youusedthecarforwork. nIfyouusedthelogbookmethodandownedyour carforonlypartoftheyear,youwillneedto apportionyourdeductionaccordingly. Ifyouareclaimingadeductionforthedeclineinvalue ofacar,youshouldrefertothepublicationGuide to depreciating assets 2010(NAT1996).Tofindouthow togetacopy,seetheinsidebackcover.
Was your car sold, disposed of, stolen or destroyed? Ifyouhavebeenclaimingdeductionsforyourcar and,duringtheincomeyear,yousoldordisposed ofit,oritwasstolenordestroyed,youmayneed tomakeabalancingadjustment.Youdonotneed tomakeabalancingadjustmentifyouusedonly thecentsperkilometreor12%oforiginalvalue methodforcalculatingexpensesforyourcar.
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D1 Work-relatedcarexpenses
ThepublicationGuide to depreciating assets 2010 explainshowtoworkouttheamountofthebalancing adjustment. Ifyouhadalossaftermakingtheadjustment,include yourdeductionforitatitemD5.Ifyouhadaprofit aftermakingyouradjustment,includeitatitem24 onyourtaxreturn(supplementarysection). Youalsomakeabalancingadjustmentifyou: nswitchedbetweentheone-thirdofactual expensesmethodandthelogbookmethod,or nswitchedbetweentheone-thirdofactual expensesorlogbookmethodandthecents perkilometreor12%oforiginalvaluemethod. Toworkouttheamountofthebalancingadjustment inthesesituations,contactusoryourrecognised taxadviser.
Step 1 Multiplythetotalbusinesskilometrestravelled (maximumof5,000kmpercar)bythenumber ofcentsallowedforyourcarsenginecapacity (seebelow). RATES PER bUSINESS KILOMETRE Engine capacity Ordinary engine Rotary engine Cents per kilometre
1.6litre(1,600cc) 0.8litre(800cc) 63cents orless orless 1.6012.6litre (1,6012,600cc) 2.601litre (2,601cc) andover 0.8011.3litre (8011,300cc) 1.301litre (1,301cc) andover 74cents 75cents
COMPLETINg YOUR TAX RETURN Ifyouhavemorethanonecarandyouareclaiming expensesunderdifferentmethods,addtheamounts youworkoutundereachmethodandwritethetotal atitemD1onyourtaxreturn.Printthecodeletterfor themethodthatgaveyouthelargestamountinthe CLAIM TYPEboxbesidetheamount. Method 1: Cents per kilometre nYourclaimisbasedonasetrateforeach businesskilometre. nYoucanclaimamaximumof5,000business kilometrespercar,peryear. nYoudonotneedwrittenevidence,butyouneedto beabletoshowhowyouworkedoutyourbusiness kilometres.Moreinformationonrecordkeeping andwrittenevidenceisavailableonourwebsite atwww.ato.gov.au
Step 2 Divideyouranswerby100toworkoutthedollar amountyoucanclaim. Step 3 Ifyouareclaimingformorethanonecarusingthis method,repeatthestepsaboveandaddupallthe amounts. Step 4 WritethetotalatAitemD1.PrintthecodeletterS intheCLAIM TYPEboxbesidetheamount.
Example Joannehada2-litreordinaryenginecarwhichshe usedtotravel300kminperformingherjobduring 200910.Sheclaimsadeductionof$222.

300km74cents 100 =$222
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TAXPACK 2010
Work-relatedcarexpenses D1
Method 2: 12% of original value nForyoutousethismethod,yourcarmusthave travelledmorethan5,000businesskilometresin theincomeyear(or,ifyouusedthecarforonly partoftheyearitwouldhavetravelledmorethan 5,000businesskilometreshadyouuseditforthe wholeyearseestep1below). nYourclaimisbasedon12%oftheoriginalcost ofyourcar,or12%ofitsmarketvalueatthetime youfirstleasedit. nThemaximumdeductionyoucanclaimis12% oftheluxurycarlimitfortheyearyoufirstused orleasedthecar.Seepage119forluxurycarlimits forthelast10years. nYoudonotneedwrittenevidence,butyouneed tokeeparecordofhowyouworkedoutyour kilometres.
Step 1 Ifyouownedorleasedyourcarforthewholeyear, gotostep2. Ifyouownedorleasedthecarforpartoftheyear, youwillneedtoworkoutwhetheryoucanusethis method.Firstly,workoutthenumberofbusiness kilometrestravelledandmultiplythatnumberby365. Thendividethisamountbythenumberofdaysyou hadthecarduringtheyear.Ifyouranswerismore than5,000kmyoucanusethismethod. Step 2 Multiplythecostofthecarorluxurycarlimit, whicheverisless,by0.12. Step 3 Gotostep5ifyouownedorleasedthecarfor thewholeyear. Step 4 Ifyouhadthecarforpartoftheyear,multiplythe amountyouworkedoutatstep2bythenumber ofdaysyouhadthecar.Thendivideby365. Step 5 WritethetotalatAitemD1.PrintthecodeletterT intheCLAIM TYPEboxbesidetheamount.
Method 3: One-third of actual expenses nYourcarmusthavetravelledmorethan5,000 businesskilometresintheincomeyear(or,ifyou usedthecarforonlypartoftheyearitwouldhave travelledmorethan5,000businesskilometreshad youuseditforthewholeyearseestep1below). nYouclaimone-thirdofallyourcarexpenses, includingprivatecosts(butexcludingcapitalcosts, suchasthepurchaseprice,theprincipalonany moneyborrowedtobuyyourcarandthecostof anyimprovements). nForfuelandoilcosts,youcankeepreceiptsto workouttheamountsoryoucanestimatethem basedonodometerrecordsthatshowreadings fromthestartandtheendoftheperiodyouhad thecarduringtheyear. nYouneedwrittenevidenceforalltheother expensesforthecaraswellasrecordsthat showthecarsenginecapacity,make,model andregistrationnumber.
Youmayneedtoshowhowyouworkedoutyour businesskilometresandanyestimatesyoumade. Step 1 Ifyouownedorleasedyourcarforthewholeyear, gotostep2. Ifyouownedorleasedthecarforpartoftheyear, youwillneedtoworkoutwhetheryoucanusethis method.Firstly,workoutthenumberofkilometres travelledandmultiplythatnumberby365.Then dividethisamountbythenumberofdaysyouhad thecarduringtheyear.Ifyouranswerismorethan 5,000kmyoucanusethismethod. Step 2 Addupyourtotalexpensesforfuelandoil, registration,insurance,loaninterest,repairsand maintenance,thedeclineinvalueorleasepayments andanyothercostsofrunningyourcar.Seepage29 toworkouttheamounttoshowherefordecline invalue. Step 3 Dividethetotalexpensesby3. Step 4 WritetheamountatAitemD1.PrintthecodeletterO intheCLAIM TYPEboxbesidetheamount.
TAXPACK 2010
31
D1 Work-relatedcarexpenses
Method 4: Logbook nYourclaimisbasedonthebusinessusepercentage oftheexpensesforthecar. nExpensesincluderunningcostsanddeclineinvalue butnotcapitalcosts,suchasthepurchasepriceof yourcar,theprincipalonanymoneyborrowedtobuy itandanyimprovementcosts.Ifyouneedtowork outthedeclineinvalueofyourcar,seepage29. nToworkoutyourbusinessusepercentage,you needalogbookandtheodometerreadingsfor thelogbookperiod(seebelow). nYoucanclaimfuelandoilcostsbasedoneither youractualreceiptsoryoucanestimatethe expensesbasedonodometerrecordsthatshow readingsfromthestartandtheendoftheperiod youhadthecarduringtheyear. nYouneedwrittenevidenceforallotherexpenses forthecar.
Yourbusinessusepercentageisthepercentageof kilometresyoutravelledinthecarforworkduringthe yeardividedbythetotalkilometrestravelledbythe carduringtheyear. Ifthepatternofyourcarusechangedduringthe year,makeareasonableestimateofyourbusiness usepercentageforthewholeof200910,takinginto accountyourlogbook,odometerandotherrecords, anyvariationsinthepatternofuseofyourcarand anychangesinthenumberofcarsyouusedinthe courseofearningyourincome.
nthenumberofkilometrestravelledforworkduring
thelogbookperiodbasedonthejourneysrecorded fortheperiod nthebusinessusepercentagefortheperiod. Entriesinthelogbookforeachbusinesstripmust bemadeattheendofthejourney(orassoonas possibleafterwards)andshowthe: ndatethejourneybeganandended nodometerreadingsatthestartandendof thejourney nkilometrestravelledonthejourney nreasonforthejourney. Yourrecordsmustalsoshowthemake,model, enginecapacityandregistrationnumberofthecar. Step 1 Workoutthetotalkilometrestravelledduring thelogbookperiodandhowmanyofthesewere businesskilometres.Dividethebusinesskilometres bythetotalkilometrestravelled.Thisisyourbusiness usepercentage. Step 2 Addupyourtotalexpenses.(Seepage29towork outtheamounttoincludefordeclineinvalue.) Step 3 Multiplytheamountatstep2byyourbusinessuse percentagefromstep1(orifthepatternofuseofthe carhaschangedthenusethereasonableestimate youmade). Step 4 WritetheamountatAitemD1.PrintthecodeletterB intheCLAIM TYPEboxbesidetheamount.
Logbook period Yourlogbookisvalidforfiveyears.Ifthisisthefirst yearyouareusingthismethod,youmusthavekept alogbookduring200910.Itmustcoveratleast 12continuousweeks.Ifyoustartedusingyourcarfor work-relatedpurposeslessthan12weeksbeforethe endoftheyear,youcanextendthe12-weekperiod into201011.(Ifyouareusingthelogbookmethod fortwoormorecars,thelogbookforeachcarmust coverthesameperiod.)
Ifyouestablishedyourbusinessusepercentageusing alogbookfromanearlieryear,youneedtokeepthat logbookandmaintainodometerrecords.Youalsoneed tokeepalogbookifwetoldyouinwritingtokeepone. Yourlogbookmustshow:
nwhenthelogbookperiodstartsandends,andthe
odometerreadingsatthesetimes duringthelogbookperiod
nthetotalnumberofkilometresthecartravelled
MORE INFORMATION Formoreinformation,see: nTaxation Ruling TR 95/34 Income tax: employees carrying out itinerant work deductions, allowances and reimbursements for transport expenses nDeduction for transport between workplaceson ourwebsite nGuide to depreciating assets 2010(NAT1996)for declineinvalueofacar nLaw Administration Practice Statement PS LA 1999/2 Calculating car expense deductions where the car is jointly owned, jointly leased or jointly hired under a hire purchase agreement (but is not owned, leased or hired by a partnership).
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TAXPACK 2010
Work-related travel expenses
Deductions D2
Forinformationaboutwhatexpensesyouclaimas carexpenses(itemD1)andwhatexpensesyouclaim astravelexpenses(itemD2),andsomeexamplesof tripsyoucanandcannotclaim,seeCar and travel expensesonpage28. Thisquestionisabouttravelexpensesyouincur thataredirectlyrelatedtoyourworkasanemployee. Theyinclude: npublictransportincludingairtravelandtaxifares nbridgeandroadtolls,parkingfeesandshort-term carhire nmeal,accommodationandincidentalexpenses youincurwhileawayovernightforwork nexpensesformotorcyclesandvehicleswith acarryingcapacityofonetonneormore,ornine ormorepassengerssuchasutilitytrucksand panelvans nactualexpensessuchasanypetrol,oilandrepair costsyouincurtotravelinacarthatisownedor leasedbysomeoneelse.
Ifyouremployerprovidedacarforyouoryour relativesexclusiveuseandyouoryourrelativeswere entitledtouseitfornon-workpurposes,youcannot claimadeductionforwork-relatedexpensesforits directoperation,suchaspetrol,oilandrepairs.This isthecaseeveniftheexpensesrelatedirectlytoyour work.However,youcanclaimexpensessuchas parkingandbridgeandroadtollsforwork-related useofthecar.
Reasonable allowance amounts Ifyourtravelallowancewasnotshownon yourpaymentsummaryandwasequaltoorless thanthereasonableallowanceamountforyour circumstances,youdonothavetoincludethe allowanceatitem2providedthatyouhavefully spentitondeductiblework-relatedtravelexpenses andyoudonotclaimadeductionfortheseexpenses. Did you have any work-related travel expenses?
NO YES
ANSWERINg THIS QUESTION Youmusthavewrittenevidenceforthewholeof yourclaim.

Ifyouwishtoclaimmeal,accommodationand incidentalexpensesyouincurredwhileaway overnightforwork,usethetableonpage119 todeterminewhatevidenceyouneed.Formore information,onwhatiswrittenevidenceseeour websiteatwww.ato.gov.au. Ifyoureceivedassessableincomefromyourwork asanemployeeoutsideofAustralia,includingany assessableforeignemploymentincomeshown onyourpaymentsummary,youcanclaimany work-relatedtravelexpensesyouincurredinearning thatincomeatthisitem.
TAX TIPS Makesureyoukeepaccuraterecordsoftravelto makefutureclaims.
COMPLETINg YOUR TAX RETURN Step 1 Addupallyourdeductibletravelexpenses.

Step 2 WritethetotalamountatBitemD2.
TAXPACK 2010
MORE INFORMATION Forinformationon: nshiftingplacesofemployment,seeTaxation Ruling TR 95/34 Income tax: employees carrying out itinerant work deductions, allowances and reimbursements for transport expensesonour website,orseetheinsidebackcovertofindout howtoobtainaprintedcopy nreasonableallowanceamounts,seeTaxation Determination TD 2009/15 Income tax: what are the reasonable travel and overtime meal allowance expense amounts for 200910 income year?. ReadthisdeterminationtogetherwithTaxation Ruling TR 2004/6 Income tax: substantiation exception for reasonable travel and overtime meal allowance expenses.
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D3 Deductions
Work-related clothing, laundry and dry-cleaning expenses
Thisquestionisaboutexpensesyouincurasan employeeforwork-related: nprotectiveclothing nuniforms noccupation-specificclothing,and nlaunderinganddry-cleaningofclothinglistedabove. Youcanclaimthecostofaworkuniformthatis distinctivesuchasonethathasyouremployerslogo permanentlyattachedtoitanditmustbeeither: nanon-compulsory uniformthatyouremployer hasregisteredwithAusIndustrycheckwithyour employerifyouarenotsureor nacompulsory uniformthatcanbeasetofclothing orasingleitemthatidentifiesyouasanemployee ofanorganisation.Theremustbeastrictlyenforced policymakingitcompulsorytowearthatclothingat work.Itemsmayincludeshoes,stockings,socks andjumperswheretheyareanessentialpartofa distinctivecompulsoryuniformandthecolour,style andtypearespecifiedinyouremployerspolicy.
Youcanalsoclaimthecostof: noccupation-specific clothingwhichallowspeople toeasilyrecognisethatoccupationsuchasthe checkedpantsachefwearswhenworkingand whicharenotforeverydayuse nprotective clothing and footweartoprotect youfromtheriskofillnessorinjury,ortoprevent damagetoyourordinaryclothes,causedbyyour workorworkenvironment.Itemsmayinclude fire-resistantclothing,sunprotectionclothing, safety-colouredvests,non-slipnursesshoes, steel-cappedboots,gloves,overalls,aprons, andheavydutyshirtsandtrousers(butnotjeans). Youcanclaimthecostofprotectiveequipment, suchashardhatsandsafetyglassesatitemD5. Youcanclaimthecostofrenting,repairingand cleaninganyoftheabovework-relatedclothing. Youcannotclaimthecostofpurchasingorcleaning plainuniformsorclothes,suchasblacktrousers, whiteshirts,suitsandstockings,evenifyour employerrequiresyoutowearthem.
Did you have any work-related clothing, laundry or dry-cleaning expenses?

NO YES
ANSWERINg THIS QUESTION Youwillneed: nreceipts,invoicesorotherwrittenevidence,and nanydiaryrecordsofyourlaundrycosts,ifyouneed writtenevidenceformoreinformationonwritten evidenceseeourwebsiteatwww.ato.gov.au

Youmusthavewrittenevidenceforyourlaundryand dry-cleaningexpensesif: ninthecaseoflaundryexpenses,theamountofyour claimisgreaterthan$150,and nyourtotalclaimforwork-relatedexpensesexceeds $300the$300doesnotincludecarandmeal allowance,awardtransportpaymentsallowance andtravelallowanceexpenses.
Ifyoudidwashing,dryingorironingyourself,you canuseareasonablebasistocalculatetheamount, suchas$1perloadforwork-relatedclothing,or 50centsperloadifotherlaundryitemswere included.Formoreinformationaboutwritten evidence,seeourwebsiteatwww.ato.gov.au Ifyoureceivedassessableincomefromyourwork asanemployeeoutsideofAustralia,includingany assessableforeignemploymentincomeshownon yourpaymentsummary,youcanclaimanydeductible work-relatedclothing,laundryordry-cleaning expensesyouincurredinearningthatincomeat thisitem.
34
TAXPACK 2010
Work-relatedclothing,laundryanddry-cleaningexpenses D3
COMPLETINg YOUR TAX RETURN Step 1 Addupallyourdeductiblework-relatedclothing, laundryanddry-cleaningexpenses.

Youcanalsousethework-relateduniformexpenses calculatoratwww.ato.gov.au/calculatorstoaddup yourclaimandthengotostep2. Step 2 WritethetotalatCitemD3. Step 3 Selectthecodeletterthatdescribesthemaintype ofclothingyouareclaimingfor: Nnon-compulsoryworkuniform Ccompulsoryworkuniform S occupation-specificclothing P protectiveclothing PrinttheletterintheCLAIM TYPEboxattheright ofCitemD3.
MORE INFORMATION Formoreinformationonwork-relatedclothing, laundryanddry-cleaningexpenses,see: nTaxation Ruling TR 98/5 Income tax: calculating and claiming a deduction for laundry expenses n Taxation Ruling TR 97/12 Income tax and fringe benefits tax: work-related expenses: deductibility of expenses on clothing, uniform and footwear n Taxation Ruling TR 2003/16 Income tax: deductibility of protective items n Taxation Ruling TR 94/22 Income tax: implications of the Edwards case for the deductibility of expenditure on conventional clothing by employees n Taxation Determination TD 1999/62 Income tax: what are the criteria to be considered in deciding whether clothing items constitute a compulsory corporate uniform/wardrobe for the purposes of paragraph 30 of Taxation Ruling TR 97/12?.
TAXPACK 2010
35
D4 Deductions
Work-related self-education expenses
Thisquestionisaboutself-educationexpensesthat arerelatedtoyourworkasanemployee,andthat youincurwhenyouundertakeacoursetogeta formalqualificationfromaschool,college,university orotherplaceofeducation. Toclaimadeduction,youmusthavemetoneofthe followingconditionswhenyouincurredtheexpense: nthecoursemaintainedorimprovedaskillor specificknowledgerequiredforyourthencurrent workactivities nyoucouldshowthatthecoursewasleadingto, orwaslikelytoleadto,increasedincomefromyour thencurrentworkactivities,or nothercircumstancesexistedwhichestablished adirectconnectionbetweenthecourseandyour thencurrentworkactivities. Youcannotclaimadeductionforself-education foracoursethat: nrelatesonlyinageneralwaytoyourcurrent employmentorprofession,or nwillenableyoutogetnewemployment.
nyourtuitionfeespayableunderFEE-HELP
(FEE-HELPprovidesassistancetoeligible fee-payingstudents,whoarenotsupported bytheCommonwealth,topaytuitionfees) nyourtuitionfeespayableunderVETFEE-HELP [VETFEE-HELPprovidesassistancetoeligible full-feepayingstudentsundertakingvocational educationandtraining(VET)accreditedcourses withanapprovedVETprovider] nself-educationexpensesyoupaidwithyour OS-HELPloan(OS-HELPisaloantocover expensesforeligibleCommonwealthsupported studentswhowishtoundertakestudyoverseas towardstheirAustralianhighereducationaward) nthecostofyourmealsduringtemporaryovernight absencesfromhometoparticipateinself-education nyourotherexpensessuchastextbooks,stationery, studentunionandcoursefees,andthedeclinein valueofyourcomputer(apportioneddepending onprivateuseanduseforself-education) nexpensesforyourtravelineitherdirectionbetween: yourhomeandyourplaceofeducation yourworkplaceandplaceofeducation. Onlythefirstlegofthetripisdeductibleifyouwent fromhometoyourplaceofeducationandthento work,ortheotherwayaround. Youcannotclaimcontributionsyou,orthe AustralianGovernment,makeunderHECS-HELP orrepaymentsyoumakeundertheHigherEducation LoanProgram(HELP)ortheStudentFinancial SupplementScheme(SFSS). Donotincludeatthisitemdeductionsforthecostof: nformaleducationcoursesprovidedbyprofessional associations nseminars,educationworkshopsorconferences connectedtowork. Includethematitem D5 Other work-related expenses.
Example Louisisacomputersciencestudent.Hisstudies arefocusedonsystemanalysis,softwaredesign andprogramming.Louisalsoworksattheuniversity laboratoryinstallingcomputers.Hiscourseandjob areonlyverygenerallyrelated.Theworkonlyrequires alowlevelofcomputerknowledgewhichLouis alreadyhadbeforestartinghisemployment.

Thehigh-levelprofessionalskillsLouisacquiresfrom thecoursearewellbeyondtheskillsrequiredforhis currentemployment.ConsequentlyLouiscannotclaim adeductionforhiscoursebecauseit: ndoesnotmaintainorimprovehisspecific knowledgeorskillsinhiscurrentjob nrelatesinonlyageneralwaytohiscurrent employment,and nwillenablehimtogetnewemployment. If,whenyouincurredyourexpensesyousatisfied theconditionsnecessarytoclaimadeduction,you canclaimthefollowing:
Did you have any of these expenses?

NO YES
ANSWERINg THIS QUESTION Tocompletethisitemyouwillneedwrittenevidence. Moreinformationonwhatiswrittenevidenceis availableonourwebsiteatwww.ato.gov.au

36
Youcanusetheself-educationexpensescalculatorat www.ato.gov.au/calculatorstoworkoutyourclaim, thengotostep4underCompleting your tax return onpage38.Otherwise,followtheinstructionsonthe nextpage.

TAXPACK 2010
Work-relatedself-educationexpenses D4
Toworkoutthedeductionyoucanclaimatthisitem forcarandtravelexpenses,youneedtoreadquestion D1 Work-related car expensesonpages2932and questionD2 Work-related travel expenseson page33. Ifyoureceivedassessableincomefromyour workasanemployeeoutsideofAustralia,including anyassessableforeignemploymentincomeshown onyourpaymentsummary,youcanclaimany work-relatedself-educationexpensesyouincurred inearningthatincomeatthisitem.
COMPLETINg YOUR TAX RETURN Tocompletethisitem,youmustaddupyour self-educationexpensesunderthefollowing categoriesbecause,inworkingoutwhatyou canclaim,certaincostsarereducedby$250.
WORKSHEET Category A Generalexpensesthataredeductible.Theseincludetextbooks,stationery, studentunionfees,coursefeesandpublictransportfares. Alsoincludecarexpenses(otherthanthedeclineinvalueofacar)worked outunderthelogbookorone-thirdofactualexpensesmethod.Formore information,readquestionD1 Work-related car expensesonpages2932. B Deductionsforthedeclineinvalueofdepreciatingassetsusedfor self-education,includingcomputersandcarsforwhichyouareclaiming deductionsunderthelogbookorone-thirdofactualexpensesmethod. Expensesforrepairstoitemsofequipmentusedforself-education. Carexpensesrelatedtoyourself-educationforwhichyouareclaiming deductionsunderthecentsperkilometreor12%oforiginalvaluemethod. (Ifyouhaveincludeddeductionsforthedeclineinvalueoforrepairstoyourcar undercategoryBorC,youcannotclaimcarexpensesunderthiscategory.) Self-educationexpensesthatarenotdeductible.Theseexpensesare:
n privatecosts,includingnon-deductibletravelandchildcarecosts,and n capitalcosts,likethepurchasepriceofadeskorcomputer.
Your amount
$ $
C D
DonotincludecontributionsyoumadeunderHECS-HELPorrepayments underHELPorSFSS.
TAXPACK 2010
37
D4 Work-relatedself-educationexpenses
Usetheamountsyouhavewrittenintheworksheet abovetocompletethestepsthatfollow. Step 1 IfyouhadanycategoryAexpenses,gotostep2. Otherwise,readon. AddB,CandD. $ (f)
Transfertheamountat(f)toDitemD4.Gotostep4. Step 2 AddC,DandE. $ (g)
Step 4 Selectfromthelistbelowthecodeletterthatbest describesyourself-education. KAtthetimeyouincurredtheexpensethe studymaintainedorimprovedaskillorspecific knowledgerequiredforthoseworkactivities. I Atthetimeyouincurredtheexpenseyoucould showthatthestudywasleadingto,orwaslikely toleadto,increasedincomefromthosework activities. OAtthetimeyouincurredtheexpense,other circumstancesexistedwhichestablishedadirect connectionbetweenyourself-educationandyour workactivitiesasanemployee. Step 5 Printyourcodeletter(K,IorO)fromstep4inthe CLAIM TYPEboxattherightofDitemD4.
Iftheamountat(g)islessthan$250,gotostep3. Otherwise,readon. AddA,B,CandD. $ (h)
Transfertheamountat(h)toDitemD4.Gotostep4. Step 3 Taketheamountat(g) awayfrom$250. Taketheamountat(i)away fromyourcategoryAamount. Iftheresultiszeroor less,write0at(j). AddB,CandD. Add(k)and(j). $ (i)
MORE INFORMATION Formoreinformation,see: nGuide to depreciating assets 2010(NAT1996) aboutdeductionsfordeclineinvalue,balancing adjustmentsandimmediatedeductionsforcertain depreciatingassets nTaxation Ruling TR 98/9 Income tax: deductibility of self-education expenses.
TAX TIP
(j)
$ $
(k) (l)
Tomakeworkingoutyourdeductionseasier nextyear,startkeepingyourrecordsnow.More informationaboutrecordkeepingisavailableon ourwebsiteatwww.ato.gov.au
Transfertheamountat(l)toDitemD4.
38
TAXPACK 2010
Other work-related expenses
Deductions D5
Thisquestionisaboutanyotherwork-related expensesyouincurredasanemployeeandhave notalreadyclaimed,including: nunionfeesandsubscriptionstotrade,business orprofessionalassociations novertimemealexpenses,providedthat: youreceivedagenuineovertimemealallowance fromyouremployerthatwaspaidunderan industriallaw,awardoragreement(seeMore informationonthenextpage), youhaveincludedtheamountofthemeal allowanceasincomeatitem2,and ifyourclaimwasmorethan$24.95permeal, youhavewrittenevidence,suchasreceiptsor diaryentries,thatshowsthecostofthemeals. Anamountforovertimemealsthathasbeen includedaspartofyournormalsalaryorwages (forexample,underaworkplaceagreement)is notconsideredtobeanovertimemealallowance nprofessionalseminars,courses,conferencesand workshops nreferencebooks,technicaljournalsandtrade magazines ntoolsandequipmentandprofessionallibraries.You maybeabletoclaimanimmediatedeductionforan itemthatcost$300orless.Otherwise,youclaima deductionforthedeclineinvalueofanitemoverits effectivelife.SeeGuide to depreciating assets 2010 (NAT1996)formoreinformation nitemsthatprotectyoufromtheriskofinjury orillnessposedbyyourworkoryourwork environment,suchashardhats,safetyglasses andsunscreens(butnotprotectiveclothingand footwear,whichyouclaimatitemD3) ncomputers.Youcanclaimthework-related proportionofthefollowing thedeclineinvalueofacomputer anyrepaircosts,and theinterestonmoneyborrowedtobuy thecomputer
Youmayneedtomakeabalancingadjustment ifyounolongerownorusethecomputerandyou previouslyclaimedadeductionforitsdeclinein value.SeeGuide to depreciating assets 2010for moreinformation ninternetexpenses.Youcanclaimthework-related proportionofyourinternetaccesscharges nphoneexpenses.Youcanclaimthework-related proportionofyourphonecalls.Youcanalsoclaim thework-relatedproportionofyourphonerental ifyoucanshowyouwereoncallorwereregularly requiredtophoneyouremployerorclientswhile awayfromyourworkplace nhomeofficeexpenses.Youcanclaimthe work-relatedpartofthedeclineinvalueofyour officefurnitureandfittings.Youcanalsoclaimthe work-relatedpartofyourheating,cooling,lighting andcleaningcosts.(Youcannotgenerallyclaima deductionforoccupancyexpensessuchasrent, rates,mortgageinterestandinsurance.)Youcan eitherkeepadiaryofthedetailsofyouractual costsandyourwork-relateduseoftheofficeor useafixedrateof26centsperhourforheating, cooling,lightingandthedeclineinvalueoffurniture inyourhomeoffice.Youcanusethehomeoffice expensescalculatoratato.gov.au/calculatorsto workoutyourclaim. Youcannotclaimanydeductionforthedeclinein valueoflaptops,portableprinters,personaldigital assistants,calculators,mobilephones,computer software,protectiveclothing,briefcasesandtoolsof tradeprimarilyforuseinyouremploymentiftheitem wasprovidedtoyoubyyouremployer,orsomeor allofthecostoftheitemwaspaidorreimbursed byyouremployer,andthebenefitwasexemptfrom fringebenefitstax.
Did you have any other work-related expenses?

NO YES
ANSWERINg THIS QUESTION Youwillneedsomeofthefollowing: nyourPAYG payment summary individual non-business nstatementsfromyourbank,buildingsociety orcreditunion
nreceipts,invoicesorwrittenevidencefromyour
supplierorassociation
notherwrittenevidence.
Ifyourtotalclaimforallwork-relatedexpenses exceeds$300,youmusthavewrittenevidence.More informationonwhatiswrittenevidenceisavailableon ourwebsiteatwww.ato.gov.au

39
TAXPACK 2010
D5 Otherwork-relatedexpenses
Ifyoureceivedassessableincomefromyour workasanemployeeoutsideAustralia,including anyassessableforeignemploymentincome shownonyourPAYG payment summary foreign employment,youcanclaimanywork-related expensesyouincurredinearningthatincomeat thisitemprovidedyouhavenotalreadyclaimed theexpenseatanotheritem.
COMPLETINg YOUR TAX RETURN Step 1 Addupalltheexpensesthatyoucanclaimat thisitem.

Toworkouttheamountyoucanclaimfor depreciatingassets,seeGuide to depreciating assets 2010. Step 2 WritethetotalamountatEitemD5.
MORE INFORMATION Formoreinformation,see: n Guide to depreciating assets 2010(NAT1996) forinformationondeclineinvalueandbalancing adjustments n Taxation Ruling TR 93/30 Income tax: deductions for home office expenses n Taxation Ruling TR 2004/6 Income tax: substantiation exception for reasonable travel and overtime meal allowance expenses n Law Administration Practice Statement PS LA 2001/6 Home office expenses: diaries of use and calculation of home office expenses n Law Administration Practice Statement PS LA 2005/7 Substantiation of deductions claimed by individual taxpayers for work and car expenses incurred in the course of earning non-business and non-investment income.
Thesepublicationsareavailableonourwebsite,or seetheinsidebackcovertofindouthowtoobtain aprintedcopy.
40
TAXPACK 2010
Low-value pool deduction
Deductions D6
Thisquestionisaboutclaimingadeductionforthe declineinvalueoflow-costandlow-value assets youusedinthecourseofproducingincomeyou showonyourtaxreturn,byallocatingthemto whatiscalledalow-value pool.(Claimsfordeduction forthedeclineinvalueofassetsaredealtwithat otherquestions.) Low-cost assetsaredepreciatingassetsthatcost lessthan$1,000. Low-value assetsaredepreciatingassetsthat arenotlow-costassetsbutwhich,on1July2009, hadbeenwrittenofftolessthan$1,000underthe diminishingvaluemethod. Youcanhaveonlyonelow-valuepool.Onceyou choosetoallocatealow-costassettoalow-value pool,youmustallocatetothepoolallotherlow-cost assetsyouholdinthatyearandinfutureyears. Assetsyoucanallocatetoalow-valuepoolinclude assetsyouuse: ninyourworkasanemployee(seequestionsD1 toD5),or ntogainrentalincome(seequestion21in TaxPack 2010 supplement). However,ifyouclaimthedeductionatthisitem, donotclaimitatitemsD1toD5and21.
Thefollowingcannotbeincludedinalow-valuepool: nassetsyouhavepreviouslyclaimeddeductions forusingtheprimecostmethod nassetsthatcost$300orlessforwhichyoucan claimanimmediatededuction nassetsforwhichyoudeductamountsunderthe simplifieddepreciationrulesforsmallbusiness entitiesformoreinformation,seeBusiness and professional items 2010(NAT2543) nhorticulturalplants naportableelectronicdevice(suchasa mobilephone,personaldigitalassistantorlaptop computer),computersoftware,protectiveclothing, abriefcaseoratooloftrade,whichisprimarilyfor useinyouremployment,ifyouremployerprovided it,paidforitorreimbursedyouforanyofitscost, andthebenefitwasexemptfromfringebenefitstax. Ifyourlow-valuepoolcontainsonlyassetsusedin business,donotincludeyourdeductionhere,but includeitinsteadatitemP8ontheBusiness and professional items schedule for individuals 2010 (NAT2816).
Did you allocate assets to a low-value pool in 200910 or in a previous year?

NO YES
ANSWERINg THIS QUESTION Whenyouallocateanassettoalow-valuepool,you mustmakeareasonableestimateofthepercentage youwillusetheassettoproduceyourassessable incomeoveritseffectivelife(foralow-costasset)or remainingeffectivelife(foralow-valueasset).This estimateiscalledyour taxable use percentagefor theasset.
Youworkoutyourlow-valuepooldeductionusing adiminishingvaluerate.Arateof37.5%isgenerally appliedtothepoolbalance.However,arateof 18.75%,orhalfthenormalpoolrate,isapplied tothetaxable use percentageof: nthecostofeachlow-costassetyouallocateto thepoolthisincomeyear
nanyadditionalcapitalcosts(suchasimprovements)
youincurthisincomeyearforassetsyouallocatedto thepoolinanearlierincomeyearandforlow-value assetsyouallocatetothepoolthisincomeyear.
Readexample 1,thenuseworksheet 1toworkout yourdeduction.
Example 1 Edwardboughtaprinterfor$600in200910.His employerdidnotpayorreimburseanyofthecost oftheprinter.Hedecidedtoallocateittoalow-value pool.Heestimatedthatoveritseffectivelifethe printerwouldbeused40%ofthetimetoproduce hisassessableincomeasanemployee.

$60040%is$240.Therefore,Edwardwillwrite $240at(e)inworksheet 1. ThisisthefirstyearofEdwardslow-valuepool.
TAXPACK 2010
41
D6 Low-valuepooldeduction
Edwardpreviouslyclaimeddeductionsunderthe diminishingvaluemethodforalaptopcomputerhehad purchasedfor$1,500.Hisemployerdidnotpayor reimburseanyofthecostofthecomputer.Thelaptops openingadjustablevalueon1July2009was$900.
Edwardestimatesthathewilluseitsolelytoproduce hisassessableincomeforitsremainingeffectivelife. Edwardallocatesthelaptoptothepoolin200910 asitisnowalow-valueasset.
WORKSHEET 1 Low-value pool deduction Edward Theclosingbalanceofthepoolfor200809.Ifyoudidnothave alow-valuepoolin200809,write0at(a). Foreachlow-value assetallocatedtothepoolin200910,multiply itsopeningadjustablevalue(on1July2009)byyourtaxableuse percentagefortheasset.Adduptheamountsandwritethetotalat(b). Add(a)and(b). Multiply(c)by0.375. Foreachlow-cost assetallocatedtothepoolin200910,multiply itscost(includingadditionalcapitalcostsincurredin200910,such asimprovements)byyourtaxableusepercentagefortheasset. Adduptheamountsandwritethetotalat(e). Foreach nassetallocatedtothepoolinapriorincomeyear,and nlow-valueassetallocatedtothepoolin200910 forwhichyouincurredadditionalcapitalcosts(suchasimprovements) in200910,multiplythecostsbyyourtaxableusepercentageforthe asset.Adduptheamountsandwritethetotalat(f). Add(e)and(f). Multiply(g)by0.1875. Add(d)and(h). $0 You $ (a)
$900 $900 $337
$ $ $
(b) (c) (d)
$240
(e)
$0 $240 $45 $382
$ $ $ $
(f) (g) (h) (i)
Theamountat(i)isthetotallow-valuepooldeduction.Edwardwillshow$382atKitemD6 onhistaxreturn.
42
TAXPACK 2010
Low-valuepooldeduction D6
COMPLETINg YOUR TAX RETURN Step 1 Usingworksheet 1,workoutyourtotallow-value pooldeduction.Transfertheamountyouworkedout at(i)toKitemD6.

Step 2 Youwillneedtheclosingpoolbalancefor200910to calculateyourlow-valuepooldeductionfornextyear. Useworksheet 2toworkouttheclosingbalance. Somecommonevents,suchasthesaleordisposal ofanassetinthelow-valuepool,ortheassetslossor destructionresultinabalancingadjustmentevent. Iftherehasbeenabalancingadjustmenteventforan assetinthepool,youmustreducetheclosingpool balance.Todothis,youmultiplytheassetstermination value(generallyanyproceeds,includinganyinsurance WORKSHEET 2 Closing balance for 200910
payout,fromtheevent)byyourtaxableusepercentage fortheasset.Yourclosingpoolbalanceisreducedby theamountthatresultsfromthismultiplication.Thereis spaceforyoutoincludethisamountinworksheet 2.If thisamountismorethantheclosingpoolbalance,you reducetheclosingpoolbalancetonilandincludethe excessamountasincomeatitem24onyourtax return(supplementarysection). Keeparecordofyour200910closingpoolbalance fornextyearstaxreturn.
MORE INFORMATION Formoreinformation,seeGuide to depreciating assets 2010(NAT1996).Thispublicationisavailable onourwebsite,orseetheinsidebackcovertofind outhowtoobtainaprintedcopy.
Edward Transferamountfrom(a)inworksheet 1. Transferamountfrom(b)inworksheet 1. Transferamountfrom(e)inworksheet 1. Transferamountfrom(f)inworksheet 1. Add(j),(k),(l)and(m). Transferamountfrom(i)inworksheet 1. Take(o)awayfrom(n). $0 $900 $240 $0 $1140 $382 $758
You $ $ $ $ $ $ $ (j) (k) (l) (m) (n) (o) (p)
Foreachpoolassetsubjecttoabalancingadjustmenteventin200910, multiplyitsterminationvaluebyyourtaxableusepercentageforthe asset(seestep2above).Adduptheamountsandwritethetotalat(q). $0 Take(q)awayfrom(p).Thisisyourclosingpoolbalancefor200910. $758
$ $
(q) (r)
TAXPACK 2010
43
D7 Deductions
Interest deductions
Ifyouhaveelectedtohavethetaxationoffinancial arrangements(TOFA)rulesapplytoyourtaxaffairs, beforeyoucompleteyourtaxreturnandthisitem youmustreadCompletingthetaxreturnfor individualswheretheTOFArulesapplyavailable onourwebsiteatwww.ato.gov.au/tofa Thisquestionisaboutexpensesyouincurredin earninganyinterestyoudeclaredatitem10. Yourexpensesmayinclude: nbankorotherfinancialinstitutionaccount-keeping feesforaccountsheldforinvestmentpurposes nmanagementfees,andfeesforinvestmentadvice relatingtochangesinthemixofyourinvestments.
Showanyexpensesincurredinearningtrustand partnershipdistributionsatXandYitem13onyour taxreturn(supplementarysection). Donotshowexpensesincurredinearningforeign sourceinterestatthisitem.Theyaretaken intoaccountatitem20orD16onyourtaxreturn (supplementarysection).
Do you have any interest deductions?

NO YES
ANSWERINg THIS QUESTION Youwillneed: nyourbankorfinancialinstitutionstatementsor passbooks.

Youcannotclaimaccount-keepingfeesonafirst homesaveraccount. Ifyouhadanyjointaccountsorotherinterest-earning investments,showonlyyourshareofthejoint expenses.Thiswillbehalfifyouheldtheaccount orinvestmentequallywithoneotherperson.Keep arecordofhowyouworkedoutyourproportionif youandtheotherinvestorsoraccountholdersdid notsharetheexpensesequally. Ifyouborrowedmoneytopurchaseassetsforyour privateuseandincome-producinginvestments,you canclaimonlytheportionoftheinterestexpenses relatingtotheincome-producinginvestments. Youcanalsoclaimaproportionofthedeclineinvalue ofyourcomputerbasedonthepercentageofyour totalcomputerusethatrelatedtomanagingyour investments.Ifyouusedyourcomputertomanage yourinvestmentinbothinterest-earninginvestments andinvestmentsinsharesorsimilarsecuritiesthen youcanclaimonlytheproportionofthedeclinein valuerelatedtomanagingthoseinvestmentsonce. Youclaimtheamountateitheritem D7orD8.
Youcannotclaimexpensesyouwerechargedfor drawingupaninvestmentplanunlessyouwere carryingonaninvestmentbusiness,inwhichcase youwouldclaimanyexpensesatitem P8onthe Business and professional items schedule for individuals 2010(NAT2816). Ifyouincurredparticulartypesofexpenses,such asinterestonborrowedmoney,relatingtocertain overseasinvestments(orinvestmentsinAustralia ifyouwereaforeignresident)yourclaimsmaybe affectedbythincapitalisationrules.Theserulesmay applyifthetotalofyourdebtdeductionsandthoseof yourassociatesismorethan$250,000for200910. Formoreinformation,gotowww.ato.gov.auand enterThincapitalisationintheSearchforbox.
COMPLETINg YOUR TAX RETURN Step 1 Addupallyourdeductionsforthisitem.

Step 2 WritethetotalamountatIitemD7.
MORE INFORMATION Formoreinformation,see: nGuide to depreciating assets 2010(NAT1996) ifyouareclaimingadeductionforthedeclinein valueofyourcomputer.
44
TAXPACK 2010
Dividend deductions
Deductions D8
Thisquestionisaboutexpensesyouincurredin earninganydividendandsimilarinvestmentincome youdeclaredatitem11. Ifyouhaveelectedtohavethetaxationoffinancial arrangements(TOFA)rulesapplytoyourtaxaffairs, beforeyoucompleteyourtaxreturnandthisitem youmustreadCompletingthetaxreturnfor individualswheretheTOFArulesapplyavailable onourwebsiteatwww.ato.gov.au/tofa Youmustalsocompletethisitemifyouhadalisted investmentcompany(LIC)capitalgainamountin yourdividends. Yourexpensesmayinclude: nmanagementfees,andfeesforinvestmentadvice relatingtochangesinthemixofyourinvestments ninterestchargedonmoneyborrowedtopurchase sharesorsimilarinvestments
astravelandbuyingspecialistinvestmentjournals orsubscriptions. Showanyexpensesincurredinearningtrustand partnershipdistributionsatXandYitem13onyour taxreturn(supplementarysection). Donotshowexpensesincurredinearningforeign sourcedividendsatthisitem.Theyaretakeninto accountatitem20orD16onyourtaxreturn (supplementarysection).
ncostsrelatingtomanagingyourinvestments,such
Do you have any dividend deductions?

NO YES
ANSWERINg THIS QUESTION Youwillneedyourdividendstatementsshowingany LICcapitalgainamount.(Showdividendsreceived fromaLICatitem11.) Ifyouhadanyjointshareinvestmentsorsimilar investments,showonlyyourshareofjointexpenses. Thiswillbehalfifyouheldtheinvestmentequallywith oneotherperson.Keeparecordofhowyouworked outyourproportionifyouandtheotherinvestorsdid notsharetheexpensesequally. Ifyouborrowedmoneytopurchaseassetsforyour privateuseandincome-producinginvestments,you canclaimonlytheportionoftheinterestexpenses relatingtotheincome-producinginvestments. Interestoninvestmentsunderacapitalprotected borrowingmaynotbefullydeductible.Formore informationgotowww.ato.gov.au andenter Aboutcapitalprotectedproductsandborrowings intheSearchforbox. Youcanalsoclaimaproportionofthedeclineinvalue ofyourcomputerbasedonthepercentageofyour totalcomputerusethatrelatedtomanagingyour investments.Ifyouusedyourcomputertomanage yourinvestmentinbothinterest-earninginvestments andinvestmentsinsharesorsimilarsecuritiesthen youcanclaimonlytheproportionofthedeclinein valuerelatedtomanagingthoseinvestmentsonce. YoucanclaimtheamountatitemD7orD8. Youcannotclaimexpensesyouwerechargedfor drawingupaninvestmentplanunlessyouwere carryingonaninvestmentbusiness,inwhichcase
TAXPACK 2010
youwouldclaimanyexpensesatitemP8on theBusiness and professional items schedule for individuals 2010(NAT2816). IfyouwereanAustralianresidentwhenaLICpaid youadividendandthedividendincludedaLICcapital gainamount,youcanclaimadeductionof50%ofthe LICcapitalgainamount.TheLICcapitalgainamount willbeshownseparatelyonyourdividendstatement. Ifyouincurredparticulartypesofexpenses,such asinterestonborrowedmoney,relatingtocertain overseasinvestments(orinvestmentsinAustralia ifyouwereaforeignresident)yourclaimsmaybe affectedbythethincapitalisationrules.Theserules mayapplyifthetotalofyourdebtdeductionsand thoseofyourassociatesismorethan$250,000for 200910.Formoreinformationgotowww.ato.gov.au andenterThincapitalisationintheSearchforbox.
COMPLETINg YOUR TAX RETURN Step 1 Addupallyourdeductionsforthisitem.

Step 2 WritethetotalamountatHitemD8.
MORE INFORMATION Formoreinformation,see: nYou and your shares 2010 (NAT2632) nGuide to depreciating assets 2010(NAT1996) ifyouareclaimingadeductionforthedeclinein valueofyourcomputer.
45
D9 Deductions
Gifts or donations
Thisquestionisaboutgiftsordonationsyoumade. Youcanclaimadeductionfor: nvoluntarygiftsof$2ormoremadetoanapproved organisation nanetcontributionofmorethan$150toan approvedorganisationforafund-raisingevent (seepage120forfurtherconditions) ncontributionsof$2ormoreto aregisteredpoliticalparty anindependentcandidateinanelectionfor parliament anindividualwhowasanindependentmember ofparliamentorinlimitedcircumstanceswasan independentmember. Approvedorganisationsinclude: ncertainfunds,organisationsorcharitieswhich providehelpinAustralia nsomeoverseasaidfunds nschoolbuildingfunds nsomeenvironmentalorculturalorganisations.
Youcanalsoclaimadeductionfor: nadonationtoanapprovedorganisationofshares listedonanapprovedstockexchangevalued at$5,000orless nmakinganapprovedculturalbequest nadonationtoaprivateancillaryfund nenteringintoaconservationcovenant. Yourreceiptwillusuallyindicatewhetherornotyoucan claimadeductionforthegift.Ifyouarenotsure,you cancheckwiththeorganisation.Ifyouarestillnotsure, gotowww.abn.business.gov.au orphoneustofind outiftheorganisationisanapprovedorganisation. Employeeswhomakedonationsundersalary sacrificearrangementsarenotentitledtoclaiman incometaxdeductionforthedonationontheirown taxreturn. Youcannotclaimadeductionforagiftordonation ifyoureceivedsomethinginreturn(forexample, raffleticketsordinner)exceptincertainfund-raising eventsseepage120.
Did you make a gift or donation?

NO YES
ANSWERINg THIS QUESTION Ifyoumadedonationsduringtheyeartoan approvedorganisationthroughyouremployers payrollsystem(knownasworkplace-giving),you stillneedtorecordthetotalamountofyourdonations atthisitem.Yourpaymentsummaryorotherwritten statementfromyouremployershowingthedonated amountissufficientevidencetosupportyourclaim. Youdonotneedtohaveareceipt.
Ifyoumadedonationsinajointname,includeonly yourshare. Seepage120formoreinformationabouttherules fordeductionsfor: ngiftsofproperty,suchaslandandartworks ncontributionstofund-raisingevents ngiftsofsharesvaluedat$5,000orless ncontributionsandgiftstoregisteredpoliticalparties andindependentcandidatesandmembers. Gotoourwebsiteatwww.ato.gov.auandenterMaking taxdeductibledonationsintheSearchforboxformore informationabouttherulesandwhatrecordstokeep:
46
nforcultural,environmentalandheritagepropertygifts nforculturalbequests nwhenenteringintoconservationcovenants nifyouchoosetospreadoverfiveyearsyour
deductionforcertaintypesofgifts.
COMPLETINg YOUR TAX RETURN Step 1 Adduptheamountsofallgiftsanddonationsyou areentitledtoclaim.

Step 2 WritethetotalatJitemD9.
MORE INFORMATION Formoreinformation,see: nTaxation Ruling TR 2005/13 Income tax: tax deductible gifts what is a gift nLaw Administration Practice Statement PS LA 2002/15 Evidence for making of a gift by a taxpayer who participates in a workplace-giving program.
TAXPACK 2010
Cost of managing tax affairs
Deductions D10
Thisquestionisabout: nexpensesyouincurred*inmanagingyourtaxaffairs, includingfeespaidtoarecognisedtaxadviserfor doingyourtaxreturn naninterestchargeweimposedonyou namountswechargedtoyouforunderestimatinga variedgoodsandservicestax(GST)instalmentorpay asyougo(PAYG)instalment nexpensesforcomplyingwithyourlegalobligations relatingtoanotherpersonstaxaffairs.
*You incuranexpenseintheincomeyearwhen: youreceiveabillorinvoiceforanexpensethatyouareliablefor andmustpay(evenifyoudontpayituntilaftertheendoftheyear) youdonotreceiveabillorinvoicebutyouarechargedand youpayfortheexpense.
Did you incur any expenses relating to managing your tax affairs?
NO
GotoDeductions that you show on the supplementary section of the tax return. Readbelow.
YES
ANSWERINg THIS QUESTION Thecostofmanagingyourtaxaffairscaninclude: nthepreparationandlodgmentofyourtaxreturn andactivitystatements ntraveltoobtaintaxadvicefromarecognised taxadviser nappealsmadetotheAdministrativeAppeals Tribunalorcourtsinrelationtoyourtaxaffairs nobtainingavaluationneededforadeductible donationofpropertyorforadeductionforentering intoaconservationcovenantseeGifts of property onpage120formoreinformation.
Expensesrelatingtothepreparationandlodgment ofyourtaxreturnandactivitystatementsinclude costsassociatedwith: nbuyingtaxreferencematerial nlodgingyourtaxreturnthrougharegistered taxagent nobtainingtaxadvicefromarecognisedtaxadviser ndealingwiththeTaxOfficeaboutyourtaxaffairs. Feespaidtoarecognisedtaxadviserare deductibleintheyearyouincurthem.Arecognised taxadviserisaregisteredtaxagent,barristeror solicitor.Alistofregisteredtaxagentscanbefound atwww.tpb.gov.auoryoucancheckwiththe TaxPractitionersBoardon1300 362 829. Youcannotclaimforthecostoftaxadvicegiven byapersonwhoisnotarecognisedtaxadviser.
Youcanclaimadeductionforaninterestcharge thatweimposedon: nthelatepaymentoftaxesandpenalties ntheamountofanyincreaseinyourtaxliabilityas aresultofanamendmenttoyourassessment ntheamountofanyincreaseinothertaxliabilities, suchasGSTorPAYGamounts. Theexpenseisdeductibleintheyearyouincur theinterestcharge. However,youcannotclaimtaxshortfallandother penaltiesforfailingtomeetyourobligations. Youcanclaimamountsthatweimposedonyoufor underestimatingavariedGSTorPAYGinstalment. Youcanclaimanycostsyouincurredincomplying withyourlegalobligationsrelatingtoanotherpersons taxaffairs.Thisincludes: ncomplyingwiththePAYGwithholdingobligations forexample,whereyouwithheldtaxfromapayment toasupplierbecausethesupplierdidnotquotean Australianbusinessnumber nprovidinginformationthatwerequestedabout anothertaxpayer.
COMPLETINg YOUR TAX RETURN Step 1 Addupthecostsofmanagingyourtaxaffairs.

Step 2 WritethetotalatMitemD10.
TAXPACK 2010
47
D Deductions
Deductions that you show on the supplementary section of the tax return
ndebtdeductionsyouhavenotclaimedelsewhere
YouneedtouseTaxPack2010supplementifyou hadanyofthefollowingtypesofdeductions: nAustralianfilmindustryincentives nthedeductibleamountoftheundeductedpurchase priceofaforeignpensionorannuity npersonalsuperannuationcontributions ncertaincapitalexpendituredirectlyconnectedwith aproject nforestrymanagedinvestmentschemedeductions nelectionexpensesforlocal,territory,stateorfederal candidates ncertaindeductiblecapitalexpenditureyouhad notclaimedinfullbeforeceasingaprimary productionbusiness nnon-capitallossesincurredonthedisposalor redemptionofatraditionalsecurity ninsurancepremiumspaidforincomeprotection, sicknessandaccidentcover ndeductibleforeignexchangelosses ninterestyouincurredonmoneyborrowedtoinvest underthelandtransportfacilitiestaxoffsetscheme orinfrastructureborrowingsscheme
thatyouincurredinearningassessableincome orinearningcertainforeignnon-assessable non-exemptincome namountsdeductibleunderthefive-yearwrite-off forcertainbusiness-relatedcapitalexpenditure undersection40-880oftheIncomeTax AssessmentAct1997(sometimesknown astheblackholeexpenditurerule) nsmallbusinesspooldeductionsfordepreciating assetsthatyouallocatedtoapoolunderthe formersimplifiedtaxsystem(STS)provisions, andyounolongercarryonanybusiness nadeductionforthenetpersonalservicesincome lossofapersonalservicesentitythatrelatedto yourpersonalservicesincome nUnitedMedicalProtectionLimited(UMP)support payments nlossesfromfinancialarrangementscalculated underthetaxationoffinancialarrangements (TOFA)rules.
Did you have any of the above deductions?

no yeS
GotoTotal deductions. Readbelow.
anSWering tHiS QueStion YoucanfindtheTaxreturnforindividuals (supplementarysection)2010atthebackof TaxPack2010supplement.Ifyoudonthavea copyofthissupplement,youcangetonefrommost newsagentsduringthelodgmentperiod(1Julyto 31October2010).Copiesarealsoavailableallyear fromourPublicationsDistributionService(seethe insidebackcover)andshopfronts.
Completing your tax return Step 1 Completethedetailsatthetopofpage13onyour Taxreturnforindividuals(supplementarysection) 2010.UseTaxPack2010supplementtocomplete theDEDUCTIONSsectiononpage15ofyour taxreturn(supplementarysection).
Step 2 TransfertheamountyouwroteatTOTAL SUPPLEMENT DEDUCTIONSonpage15of yourtaxreturn(supplementarysection)toDon page4ofyourtaxreturn.
48
TAXPACK 2010
Total deductions
Deductions
COMPLETINg YOUR TAX RETURN GotoTOTAL DEDUCTIONSonpage4ofyour taxreturn.

Step 1 Checkthatyouhaveshownallyourdeductions.
Step 2 AddupthedeductionsyouclaimedatitemsD1toD10 andDonpage4ofyourtaxreturn.Ifyoudidnotuse theTax return for individuals (supplementary section) 2010youwillnothaveanamountatD. Step 3 WritetheansweratTOTAL DEDUCTIONSonyour taxreturn.
Subtotal
COMPLETINg YOUR TAX RETURN IfyoushowincomeatTOTAL INCOME OR LOSS onpage3ofyourtaxreturn: ntakeawaytheamountatTOTAL DEDUCTIONS fromtheamountatTOTAL INCOME OR LOSS; writetheresultatSUBTOTAL niftheamountatSUBTOTALislessthanzero,print LintheLOSSboxattherightoftheamount.
IfyoushowalossatTOTAL INCOME OR LOSS onpage3ofyourtaxreturn: naddtheamountatTOTAL DEDUCTIONStothe amountatTOTAL INCOME OR LOSS nwritetheresultatSUBTOTAL,andprintLinthe LOSSboxattherightoftheamount.
TAXPACK 2010
49
L1 Losses
Tax losses of earlier income years
Thisquestionisabouttaxlossesfromearlierincome yearsforwhichyoumaybeabletoclaimadeduction in200910.
Donotshowatthisitemcapitallosses,expenses andlossesinrelationtoearningforeignsource income,anddeferrednon-commercialbusiness lossesfromaprioryear. RefertoTaxPack 2010 supplementifyouhaveany ofthefollowing: ncapitallossesseequestion18 nexpensesandlossesinrelationtoearningforeign sourceincomeseequestion 20 ndeferrednon-commercialbusinesslossesfrom aprioryear forpartnershipactivitiesseequestion13,or forsoletraderactivitiesseequestionP8in Business and professional items 2010(NAT2543).
Did you have any of these losses?

NO YES
GotoTAXABLE INCOME OR LOSS. Readbelow.
ANSWERINg THIS QUESTION Completethisitemonlyif: nyouhaveataxlossfromanearlierincomeyear whichyouhavenotclaimedasadeduction,or nyouhadforeignlossesinthe199899to200708 incomeyearswhichyouhavenotclaimedasa deduction.

Ineithercase,youmayhaveataxlossatitemL1this yearwhichyoumaybeabletoclaimasadeduction. Youhavetocompletethisitemwhetherornotyou areabletoclaimadeductionforthelossthisyear. Youwillneedtogotowww.ato.gov.auortoe-taxto workouttheamountofyourtaxlossestocomplete itemL1ifanyofthefollowingapply: nyouhadforeignlossesinthe199899to200708 incomeyearswhichyouhavenotclaimedasa deductioninapreviousincomeyear nyoushowedalossatTAXABLE INCOME OR LOSSonyour2009taxreturnand youareaforeignresidentandhaveexempt incomefromAustraliansourcesorexemptfilm income,or youmadeafilmlossfor200910,thatis,your filmdeductionfortheyearexceedsthesumof yourassessablefilmincomeandnetexemptfilm incomefortheyear. Ifyoubecamebankruptbefore1July2009,orwere releasedfromdebtsunderanarrangemententered intounderthebankruptcylawsbefore1July2009, yougenerallycannotclaimadeductionfortaxlosses incurredbeforeyoubecamebankruptorwere releasedfromthedebts.
50
Ifyouhavetaxlossesfrommorethanoneearlier incomeyearyoushouldgenerallydeducttheearliest lossesfirst. Tocompletethisitemonyourtaxreturnyouwillneed recordsofyourtaxlossesfromearlierincomeyears.
COMPLETINg YOUR TAX RETURN Theamountoftaxlossesfromearlieryearsthat youwriteatQandRitemL1istheamountof taxlossesyoucarriedforwardfrom200809less theamountofyournetexemptincomefor200910.

Youneedtoseparateyourlossesintoprimary productionlossesandnon-primaryproduction losses.Primaryproductionactivitiesaredescribed inInformation for primary producers 2010(NAT1712) whichisavailableonourwebsiteatwww.ato.gov.au
Part A Losses carried forward from earlier income years Useworksheet 1toworkoutwhattowriteatQ andRitemL1.
Step 1 Writeat(a)inworksheet 1thetotalamountoftax lossesyouhaveavailablefromearlieryears.Donot includenon-primaryproductionlossesfrom198889 orearlieryears. Separatetheamountat(a)intoyourlossesfrom primaryproductionandfromnon-primaryproduction. Writetheamountsat(b)and(c)respectively.
TAXPACK 2010
Taxlossesofearlierincomeyears L1
Step 2 Writeat(d)thetotalofyourexemptincomefor 200910,ifany(seepages1113tofindoutwhat amountsareexemptincome). Step 3 Writeat(e)thetotalexpenses(otherthancapital expenses)incurredinearningyourexemptincome. Thisamountshouldalsoincludeanyforeigntax payableonyourexemptincome. Step 4 Take(e)awayfrom(d)andwritetheanswerat(f). If(e)ismorethan(d),write0at(f).
Step 5 If(f)ismorethan(a),youdonothaveanylossesyou canclaimatthisitem.LeaveitemL1blankandgoto TAXABLE INCOME OR LOSSonpage54.Otherwise, take(f)awayfrom(a)andwritetheanswerat(g).

nIfyouhaveanamountat(b)butnotat(c),take(f)
Step 6
awayfrom(b)andwritetheanswerat(h). awayfrom(c)andwritetheanswerat(i).
nIfyouhaveanamountat(c)butnotat(b),take(f) nIfyouhaveamountsatboth(b)and(c),youchoose
howmuchof(f)totakefromeachof(b)and(c).
Youcannothaveanegativeamountat(h)or(i),and thetotalof(h)and(i)mustequal(g).
WORKSHEET 1 Total losses Primary production losses $ $ $ $ Non-primary production losses (a) (b) (c) (d) (e) (f)
Totaltaxlossesfromearlieryears Primaryproductionlossesfrom earlieryears Non-primaryproductionlosses fromearlieryears Exemptincomefor200910 Expensesrelatingtoyour exemptincome Netexemptincomeforthisyear Take(e)awayfrom(d). Totalprioryearlossesavailablefor usethisyear Take(f)awayfrom(a). Take(f)awayfrom(b)(primary productionlossesavailableforuse). Take(f)awayfrom(c)(non-primary productionlossesavailableforuse).
$ $
(g) (h) (i)
Youcannothaveanegativeamountat(h)or(i).Thetotalof(h)and(i)mustequal(g).
TAXPACK 2010
51
L1 Taxlossesofearlierincomeyears
Step 7 Transfertheamountat(h)toQitemL1. Step 8 Transfertheamountat(i)toRitemL1. Step 9 IftheamountatSUBTOTALonpage4ofyourtax returnisaloss,gotostep19inthenextcolumn. Otherwise,readon.
Step 15 TaketheamountatFitemL1awayfromtheamount atSUBTOTAL.WritetheansweratZitemL1. Step 16 TaketheamountatZitemL1awayfromtheamount atRitemL1. Theansweristheamountofnon-primaryproduction lossesyoucarryforwardto201011.Keeparecord ofitfornextyear. Youhavenoprimaryproductionlossestocarry forwardto201011. Youhavefinishedthisquestion.GotoTAXABLE INCOME OR LOSSonpage54. Step 17 TransfertheamountyouwroteatQitemL1toF itemL1. Step 18 TransfertheamountyouwroteatRitemL1toZ itemL1. Youhavenoprimaryproductionlossesor non-primaryproductionlossestocarryforwardto 201011.Youhavefinishedthisquestion.Goto TAXABLE INCOME OR LOSSonpage54.
Part b Losses claimed in this income year Thefollowingstepswillhelpyouworkoutwhat towriteatFandZatitemL1iftheamountat SUBTOTALisnotaloss.

Step 10 IftheamountatSUBTOTALismorethanorequal totheamountat(g)inworksheet 1,gotostep17. Otherwise,readon. Step 11 IftheamountatSUBTOTALismorethanorequal totheamountatQitemL1,gotostep14. Otherwise,transfertheamountatSUBTOTALtoF itemL1. Step 12 TaketheamountatFawayfromtheamountatQ itemL1. Theansweristheamountofprimaryproduction lossesyoucarryforwardto201011.Keeparecord ofitfornextyear. Step 13 TheamountatRitemL1istheamountof non-primaryproductionlossesyoucarryforward to201011.Keeparecordofitfornextyear. Youhavenowfinishedthisquestion.GotoTAXABLE INCOME OR LOSSonpage54. Step 14 TransfertheamountatQitemL1toFitemL1.
Part C If the amount at SUbTOTAL is a loss Step 19 IftheamountyouwroteatSUBTOTALisalossleave FandZatitemL1blank.

Step 20 Useworksheet 2toworkouttheprimary productionlossesyoucarryforwardto201011and thenon-primaryproductionlossesyoucarryforward to201011. Makesureyoushowanylossesasnegativeamounts inworksheet 2.Amountsyouwriteat(t),(u),(v)and (w)maybelosses.Ifso,showthemasnegative amounts.
52
TAXPACK 2010
Tax losses of earlier income years L1
WORKSHEET 2 Amount from SUBTOTAL This amount is a loss, show it as a negative amount. Amount from item D9 on page 4 of your tax return Amount from item D13 on page 15 of your tax return (supplementary section) Add (q) and (r). Add (s) which is either zero or positive to (p) which is negative. If (t) is positive, go to step 23. Amount from Net primary production distribution item 13 on page 13 of your tax return (supplementary section) Amount from B item 15 on page 14 of your tax return (supplementary section) Add (u) and (v). If (w) is a loss and is the same or a greater loss than (t), write the amount from (t) at (x). If (w) is a loss and is a smaller loss than (t), write the amount from (w) at (x). Otherwise, write 0 at (x). If (w) is a loss and is the same or a greater loss than (t) write 0 at (y). If (w) is a loss and is a smaller loss than (t), take (w) away from (t) and write the answer at (y). If (w) is not a loss, write the amount from (t) at (y). $ (y)
$ $
(p) (q)
Step 21 If the amount at (x) is zero, then the amount at Q item L1 is the amount of primary production losses you carry forward to 201011. Keep a record of it for next year. If the amount at (x) is not zero, then add the amount at (x) to the amount at Q item L1. When adding these two amounts ignore the fact that they are both negative amounts. The answer is the amount of primary production losses you carry forward to 201011. Keep a record of it for next year. Step 22 If the amount at (y) is zero, then the amount at R item L1 is the amount of non-primary production losses you carry forward to 201011. Keep a record of it for next year. If the amount at (y) is not zero, then add the amount at (y) to the amount at R item L1. When adding these two amounts ignore the fact that they are both negative amounts. The answer is the amount of non-primary production losses you carry forward to 201011. Keep a record of it for next year. You have finished this question. Go to TAXABLE INCOME OR LOSS on the next page. Step 23 The amount at Q is your primary production losses you carry forward to 201011. The amount at R is your non-primary production losses you carry forward to 201011. Keep a record of them for next year.
$ $
(r) (s)
(t)
(u)
$ $
(v) (w)
(x)
TAXPACK 2010
53
Income
Taxable income or loss
Thisquestionisaboutyourtotaltaxableincomeor loss.Howyoucompleteitwilldependonwhether youcompletedForZatitemL1 Tax losses of earlier income yearsonpage4ofyourtaxreturn.
Have you completed F or Z at item L1?

NO YES
GotoNo prior year lossesbelow. GotoDeducting your lossesbelow.
COMPLETINg YOUR TAX RETURN No prior year losses TransfertheamountyouhaveshownatSUBTOTAL onpage4ofyourtaxreturnto$ TAXABLE INCOME OR LOSS.
Iftheamountat$TAXABLE INCOME OR LOSS islessthanzero,printL intheLOSS box.Keep arecordofthisamounttoworkoutyourtaxlosses ofearlierincomeyearsfornextyear. Youhavenowcompletedthissection.Goto Adjusted taxable income (ATI) for you and your dependants onthenextpage.
TAX TIPS IftheamountatTAXABLE INCOME OR LOSS onyourtaxreturnisalossthatis,youhave printedLintheLOSSboxthismaynotbe theamountyoushowaslossescarriedforward fromearlierincomeyearsatitemL1onnext yearstaxreturn.Adjustmentswillhavetobe madetotakeintoaccountanyexemptincome, deductionsforgiftsordonations(itemD9)or personalsuperannuationcontributions(itemD13 onthesupplementarysectionofyourtaxreturn). PhonetheIndividualInfoline(seetheinsideback cover)formoreinformation.
Deducting your losses AdduptheamountsatFandZatitemL1 andtake thetotalawayfromtheamountyouhavewritten atSUBTOTAL.Writetheanswerat$ TAXABLE INCOME OR LOSS onyourtaxreturn.
Youcannothavealossat $ TAXABLE INCOME OR LOSS ifyouhadamountsatForZ.Thisis becauseFandZarelossesofearlierincomeyears thatyouareabletodeductfromyour200910 netincome.
54
TAXPACK 2010
Adjusted taxable income (ATI) for you and your dependants
WHO IS A DEPENDANT? Adependantcanbe: n yourspouse(seethedefinitionofspouseon page123) n yourparentoryourspousesparent n achildwhoisunder21yearsold(seethefull definitionofchildonpage123)whoisnotastudent n astudentunder25yearsoldwhoisstudyingfull timeatschool,collegeoruniversity n achild-housekeeper(yourchildofanyagewho kepthouseforyoufulltime) n aninvalidrelative(yourchild,brotherorsister) 16yearsoldorolderwho: receivesadisabilitysupportpensionoraspecial needsdisabilitysupportpensionundertheSocial Security Act 1991 receivesarehabilitationallowanceunderthe Social Security Act 1991 andimmediatelybefore theywereeligibletoreceivethatallowancethey wereeligibleforaninvalidpensionunderthatAct, or hasacertificatefromaCommonwealth-approved doctorcertifyingacontinuinginabilitytowork.
AdependantneedstobeanAustralianresidentfor taxpurposes(seepage4). Ifyouwanttoclaimataxoffsetforyourdependants youneedtoworkoutyourandyourdependants adjustedtaxableincome(ATI)fortherelevantperiod todetermine: n whetheryouareeligibleforataxoffset,and n theamountofthetaxoffsetyouareentitledto. Therelevantperiodisidentifiedinthequestions dealingwiththeparticulartaxoffsetyouwishto claim.Thismaybeallofthe200910incomeyear oraperiodduring200910.
Ifyouhadaspouseforthewholeof200910and yourspouseworkedatanytimeduringtheyear,we stillconsideryoutohavemaintainedyourspouseas adependantforthewholeincomeyear. Weconsideryoutohavemaintainedadependant evenifthetwoofyouweretemporarilyseparated, forexample,duetoholidaysoroverseastravel. Ifyoumaintainedadependantforonlypartofthe year,youmayneedtoadjustyourclaimaccordingly.
WHAT IS MAINTAININg A DEPENDANT? Youmaintainedadependantifanyofthefollowing applied: n youandyourdependantlivedinthesamehouse n yougaveyourdependantfood,clothingand lodging n youhelpedthemtopayfortheirliving,medical andeducationalcosts.
WHAT IS ATI? Thefollowingamountsareusedtocalculatea personsATI: n thepersonstaxableincome n thepersonsreportableemployersuperannuation contributions(seepage102foramoredetailed explanationofwhatareportableemployer superannuationcontributionis) n thepersonsdeductiblepersonalsuperannuation contributions(seepages379inTaxPack 2010 supplementforamoredetailedexplanationof whatadeductiblesuperannuationcontributionis) n thepersonsadjustedfringebenefits(total reportablefringebenefitamountsmultiplied by0.535) n certaintax-freegovernmentpensionsorbenefits receivedbytheperson(thisdoesnotincludeall governmentpensionsandbenefitsthatareexempt fromincometax;seepage102foranexplanation ofwhatpensionsandbenefitsareincluded) n thepersonstargetforeignincome(income andcertainotheramountsfromsourcesoutside Australiathatisnotincludedinyourtaxableincome orreceivedasafringebenefit;seepages1023for amoredetailedexplanationofwhattargetforeign incomeis) n thepersonsnetfinancialinvestmentloss (theamountbywhichthepersonsdeductions attributabletofinancialinvestmentexceededtheir totalfinancialinvestmentincome;seepages1035 foramoredetailedexplanation)
TAXPACK 2010
55
Adjustedtaxableincome(ATI)foryouandyourdependants
n thepersonsnetrentalpropertyloss(theamountby
whichthepersonsdeductionsattributabletorental propertyexceededtheirrentalpropertyincome;see page105foramoredetailedexplanation) n anychildsupportthatthepersonprovidedto anotherperson(seepage106foranexplanation ofwhatchildsupportpaymentsare).
HOW TO WORK OUT ATI Youcanuseeitherourincometestcalculatoronour websiteorworksheet 1below.

IfyouareworkingouttheATIofapersonforthe wholeyear,youcangettheamountsforworksheet 1 fromthepersonstaxreturn.Table 1showsyou wheretherelevantamountsareonthetaxreturn. TAbLE 1 Working out ATI For worksheet 1: (a) (b) (c) (d) (e) (f) (g) (h) (i) The amount comes from: TAXABLEINCOMEORLOSSonpage4ofthetaxreturn T itemIT2onpage8ofthetaxreturn HitemD13onpage15ofthetaxreturn(supplementarysection) UitemIT3onpage8ofthetaxreturn VitemIT4onpage8ofthetaxreturn Xitem IT5onpage8ofthetaxreturn Y itemIT6onpage8ofthetaxreturn WitemIT1 onpage8ofthetaxreturn,multipliedby0.535and roundeddowntothenearestdollar ZitemIT7onpage8ofthetaxreturn.
IfyouareworkingoutadependantsATIforpartof theyear,youcannotusethefiguresfromtheirtax return.Instead,youmustworkouttheamountsfor therelevantperiodandcompletetheworksheetusing thesefigures. Ifyouarecompletingataxreturnforadeceased person,oryourspousediedduringtheyearandyou needtoknowtheirATIforthewholeof200910,see theinstructionsbelowworksheet 1.
56
TAXPACK 2010
Adjustedtaxableincome(ATI)foryouandyourdependants
WORKSHEET 1 Working out a persons ATI for the relevant period You Theperiodforwhichyouneed toworkoutthepersonsATI Thepersonstaxableincome fortheperiod.Iftaxableincome isaloss,write0at(a). from: 1/7/2009 to: (a) 30/6/2010 $ $ $ $ Dependant 1 Dependant 2 Dependant 3
Thepersonsreportableemployer superannuationcontributionsfor (b) theperiod Thepersonsdeductiblepersonal superannuationcontributionsfor (c) theperiod Thepersonstax-free governmentpensionsor benefitsfortheperiod Thepersonstargetforeign incomefortheperiod Thepersonsnetfinancial investmentlossfortheperiod Thepersonsnetrentalproperty lossfortheperiod Thepersonsadjustedfringe benefitsfortheperiod Addalltheamountsfrom (a)to(h). Childmaintenancetheperson providedtoathirdpartyfor theperiod Take(j)awayfrom(i).Thisisthe personsATIfortheperiod*. (d)
(e) (f) (g) (h) (i)
$ $ $ $ $
$ $ $ $ $
$ $ $ $ $
$ $ $ $ $
(j)
(k)
*Ifyouarecompletingataxreturnforadeceasedperson,or yourspousediedduringtheyearandyouneedtoknowtheir ATIforthewholeof200910,theirATIistheamountat(k): dividedbythenumberofdaysthepersonwasalivein 200910,and multipliedby365. TheansweristhedeceasedpersonsATIforthewholeof 200910.

TAXPACK 2010 57
T1 Tax offsets
Spouse (without dependent child or student), child-housekeeper or housekeeper

Did you have a dependent spouse, child-housekeeper or housekeeper for any part of the year?
NO YES
Thefollowingdefinitionswillhelpyoudetermine whetheryouareeligibleforthistaxoffset. Yourspouseincludesanotherperson(whetherof thesamesexoroppositesex)who: nyouwereinarelationshipwiththatwasregistered underaprescribedstateorterritorylaw, nalthoughnotlegallymarriedtoyou,livedwithyou onagenuinedomesticbasisinarelationshipas acouple. Ahousekeeper issomeonewhokepthouseforyou fulltimeandalsocaredforyourdependentchildren, studentsorinvalidrelatives,oryourdependent spousewhoreceivedadisabilitysupportpension. Achild-housekeeperisyourchildwhokepthouse foryoufulltime.Yourchildincludesyouradopted child,stepchild,ex-nuptialchildorchildofyour spouse.Howeverachildwhoisafull-timestudentor afull-timeemployeeisnotconsideredtokeephouse fulltime.(Seethefulldefinitionofchildonpage123). Keeping house meansmorethansimplychild-minding orperformingdomesticduties.Itincludeshavingsome responsibilityforthegeneralrunningofthehousehold. Adjusted taxable income (ATI)isexplainedon pages557.
GotoquestionT2. Readbelow.
Shared care Youhadsharedcareifyou,andyourspouseifyou hadone,caredforyourchildforsomeoftheincome year,andsomeoneelse,suchasaformerspouse, caredforthechildfortherestoftheincomeyear.

IfyoureceivedfamilytaxbenefitPartBaspart ofashared-carearrangement,youwillneed toknowyourFTB shared-care percentage tocalculateyourspouseoffset.YourFTB shared-carepercentageisusuallynotthesame asyourSharedcarepercentagewhichappears oncorrespondenceyouhavereceivedfromthe FamilyAssistanceOffice(FAO). IfyoudonotknowyourFTB shared-care percentage,contacttheFAO,seetheinside backcover.
ANSWERINg THIS QUESTION Ifyouhadadependentspouse,readon.Ifyou hadachild-housekeeper,gotopartB.Ifyouhad ahousekeeper,gotopartC.Ifyouareclaiming acombinationofthesetaxoffsets,workthrough therelevantpartsinorder. Part A Dependent spouse Youcannotclaimthistaxoffsetif: nyouradjusted taxable income (ATI)for200910 wasmorethan$150,000 nyourspousesATIfor200910was$9,254 ormore.
ToworkoutyourATIgotopages557orgoto www.ato.gov.au/calculatorstousetheonline incometestcalculator.
Youcanclaimadependentspousetaxoffsetforany periodin200910thatyouhadaspouseandyou metalltheseconditions: nyoumaintainedyourspouseseeWhat is maintaining a dependant? onpage55 nyourspousewasaresidentifyouarenotsure, readAre you an Australian resident? onpage4 nyouwerearesidentatanytimeduring200910 nneitheryounoryourspouse(duringanyperiod theywereyourspouse)waseligibleforfamily taxbenefit(FTB)PartBorifoneofyouwaseligible forit,youwereeligibleattheshared-carerateonly. ToworkoutyourspousesATI for the period you can claimusetheworksheetonpage57. Themaximumspousetaxoffsetyoucanclaim is$2,243.
58
TAXPACK 2010
Spouse (without dependent child or student), child-housekeeper or housekeeper T1
If you are entitled to claim a dependent spouse tax offset, go to part A of Completing your tax return on the next page.
The maximum child-housekeeper tax offset you can claim is $1,828, or $2,190 if you had another dependent child or student. If you are entitled to claim a child-housekeeper tax offset, go to part B of Completing your tax return on page 62.
Part B Child-housekeeper You cannot claim this tax offset if: n your adjusted taxable income (ATI) for 200910 was more than $150,000, or n you had a spouse for all of 200910 and the combined ATI of you and your spouse was more than $150,000, or n you had a spouse for only part of the year and the sum of the following is more than $150,000 your ATI your spouses ATI for 200910 multiplied by the number of days they were your spouse divided by 365, or n you had a child-housekeeper for the whole year and their ATI for 200910 was $7,594 or more, or $9,042 or more if you had another dependent child or student.
To work out the ATI for you and your spouse go to pages 557 or go to www.ato.gov.au/calculators to use the online income test calculator. You can claim a child-housekeeper tax offset for any period in 200910 that you had a child-housekeeper and you met all these conditions: n you maintained your child-housekeeper see What is maintaining a dependant? on page 55 n your child-housekeeper was a resident if you are not sure, read Are you an Australian resident? on page 4 n you were a resident at any time in 200910 n you were not eligible for a dependent spouse tax offset under part A n you were not eligible for FTB Part B or were eligible for it only at the shared-care rate. To work out your child-housekeepers ATI for the period you can claim go to page 57 and use worksheet 1.
Part C Housekeeper You cannot claim this tax offset if: n your adjusted taxable income (ATI) for 200910 was more than $150,000, or n you had a spouse for all of 200910 and the combined ATI of you and your spouse was more than $150,000, or n you had a spouse for only part of the year the sum of the following is more than $150,000 your ATI your spouses ATI for 200910 multiplied by the number of days they were your spouse divided by 365
To work out the ATI for you and your spouse go to pages 557 or go to www.ato.gov.au/calculators to use the online income test calculator. A housekeeper is a person who worked full time keeping house for you and cared for: n a child of yours under 21 years old, irrespective of the childs ATI n any other child under 21 years old who was your dependant and whose ATI for the period you maintained them was less than the total of $282 plus $28.92 for each week you maintained them (to work out your childs ATI for the period you can claim go to page 57 and use worksheet 1) n your invalid relative who was your dependant (see page 55) and for whom you can claim a dependant tax offset (if you are not sure, you will need to read question T10 in TaxPack 2010 supplement), or n your spouse who received a disability support pension. Keeping house means more than simply child-minding or performing domestic duties. It includes having some responsibility for the general running of the household.
TAXPACK 2010
59
T1 Spouse(withoutdependentchildorstudent),child-housekeeperorhousekeeper
Youareeligibleforthehousekeepertaxoffsetfor anyperiodduringwhichyouhadahousekeeper (whokepthouseforyouwhollyinAustralia),provided youwereanAustralianresidentatanytimeduring 200910andyou: ndidnothaveaspouseand werenot entitledtoclaimachild-housekeeper taxoffsetunderpartB,and werenot eligibleforFTBPartBorwereeligible foritonlyattheshared-carerate or nhadaspousewhoreceivedadisabilitysupport pensionandyouwerenot entitledtoclaima child-housekeepertaxoffsetunderpartB or nhadaspousewhodidnotreceiveadisability supportpensionand youwerenotentitledtoclaimadependent spousetaxoffsetunderpartAora child-housekeepertaxoffsetunderpartB neitheryounoryourspousewaseligiblefor FTBPartBorwereeligibleforitonlyatthe shared-carerate,and specialcircumstancesappliedforexample, ourspousedesertedyouandyourchildren, y andyoudidnotenterintoarelationshipthat resultedinyouhavinganewspouse ouhadachildwithaseverementaldisability y whorequiredconstantattention ourspousesufferedfromanextendedmental y illnessandwasmedicallycertifiedasbeing unabletotakepartinthecareofyourchildren.
Whereyouconsiderthatspecialcircumstances applied,youwillneedtocompletethisitemand provideadditionalinformation.PrintSCHEDULE OFADDITIONALINFORMATIONITEMT1PARTC onthetopofaseparatesheetofpaper,printyour name,addressandtaxfilenumberandexplain yoursituation.Signyourscheduleandattachit topage3ofyourtaxreturn.PrintXintheYes box atTaxpayers declaration question2a onpage12 ofyourtaxreturn.Ifwedonotconsiderspecial circumstancesapplied,wewilladviseyou. Themaximumhousekeepertaxoffsetyoucanclaim is$1,828,or$2,190ifyouhadmorethanone dependentchildorstudent. Ifyouareentitledtoclaimahousekeepertaxoffset,go topartCofCompleting your tax returnonpage65.
COMPLETINg YOUR TAX RETURN Part A Dependent spouse Ifyouareeligibletoclaimthedependentspouse taxoffset,useworksheet 1toworkouttheamount.
Step 1 Complete worksheet 1. Ifyouhadmorethanonedependentspouseduring theyearyouwillneedtogothroughtheworksheet foreachspouse.
60
TAXPACK 2010
Spouse(withoutdependentchildorstudent),child-housekeeperorhousekeeper T1
WORKSHEET 1 Working out your dependent spouse tax offset Ifyouhadadependentspouseforthewholeyearandneitherofyouwereeligiblefor FTBPartBatanytimeduringtheyear,write$2,243at(d),thencontinuefromthere. Ifyouhadadependentspouseforonlypartoftheyearandneither ofyouwereeligibleforFTBPartBduringthatperiod,workoutthe numberofdaysyouhadaspouseandmultiplythisnumberby$6.15. Writetheamountat(a). IfyouoryourspousewaseligibleforFTBPartBatanytimeduringthe year,fortheperiodyouhadadependentspouse,workoutthenumber ofdaysthatneitherofyouwereeligibleforFTBPartB.Multiplythis numberby$6.15.Writetheamountat(b). IfyouoryourspousewaseligibleforFTBPartBatashared-care rateatanytimeduringtheyear,workthrough(p)to(s)belowfor theperiodyouhadadependentspouse.(IfyourFTBshared-care percentagechangedduringtheyear,workthrough(p)to(s)foreach perioditwasdifferent.) nWorkoutthenumberofdaysthatyouoryourspousewaseligible forFTBPartBatthesharecarerateandwritetheanswerat(p). nMultiplythenumberofdaysfrom(p)by$6.15andwrite theanswerat(q). nTakeyourFTBshared-carepercentageawayfrom100% andwritetheanswerat(r). nMultiplytheamountfrom(q)bythepercentagefrom(r) andwritetheanswerat(s). Writetheamountfrom(s)at(c).IfyourFTBshared-carepercentage changedduringtheyear,adduptheamountsfrom(s)andwritethe totalat(c). Add(a),(b)and(c).Writetheanswerat(d). Theamountat(d)isyourmaximumdependentspousetaxoffset. Itcannotbemorethan$2,243. TocalculateyourspousesATI,youcanusetheworksheets onpages567ortheonlineincometestcalculatorat www.ato.gov.au/calculators IfyourspousesATIfortheperiodyouareclaimingthespousetax offsetwaslessthan$286,theamountat(d)isyourspousetaxoffset. Writethisamountat(f)andgotostep3. IfyourspousesATIwas$286ormorefortheperiodyouare claimingaspousetaxoffset,deduct$282fromtheirATIanddivide theremainingamountby4.Roundthisdowntothenearestdollar. Writetheanswerat(e). Take(e)awayfrom(d).Writetheanswerat(f). $ (d)
(a)
(b)
(p) $ (q) % (r) $ (s) $ (c)
$ $
(e) (f)
61
TAXPACK 2010
Step 2 Ifyoualsowanttoclaim: nachild-housekeepertaxoffset,gotopartB ofAnswering this questiononpage59,or nahousekeepertaxoffset,gotopartCof Answering this questiononpages5960. Otherwisereadon. Step 3 Theamountat(f)isyourdependentspousetax offset.WritethisamountatPitemT1onpage5 ofyourtaxreturn. Step 4 PrintSintheCLAIM TYPEboxattherightofP itemT1. Step 5 CompletetheincometestitemsIT1toIT7onpage8 ofyourtaxreturn. Step 6 CompleteSpouse details married or de facto onpages911ofyourtaxreturn.Youneedto complete O,S,Q,A,B,C,DandEonpage10.
Part b Child-housekeeper Ifyouareeligibletoclaimachild-housekeepertax offset,useworksheet 2toworkoutyourtaxoffset amount.

Step 1 Toclaimthechild-housekeepertaxoffset,youmust firstdeterminewhichcolumntouseinworksheet 2. Ifyouhadachild(otherthanthechild-housekeeper) under21yearsold,orastudentunder25yearsold, whoseATIfortheperiodyoumaintainedthemwas equaltoormorethanthetotalof$282plus$28.92 foreachweekyoumaintainedthem,donot countthemasadependantwhencompleting thisworksheet. Ifyourchild-housekeepersATIwaslessthan$9,042 andyouhad: nanotherdependentchildunder21yearsoldor nastudentunder25yearsold,and ntheirATIfortheperiodyoumaintainedthemwas lessthanthetotalof$284plus$28.92foreach weekyoumaintainedthem,usecolumn 2. Ifthedependentchildorstudent(whoisnotyour child-housekeeper)wasyourdependantforonly partof200910,andtheirATIwaslessthanthetotal of$282plus$28.92foreachweekyoumaintained them,usethecolumn 2dailyrate.Otherwise,use thecolumn 1dailyrate. Ifyoudidnothaveanotherdependentchildunder 21yearsoldorstudentunder25yearsold,andyour child-housekeepersATIwas nlessthan$7,594,usecolumn 1 n$7,594ormore,youdontqualifyforthetaxoffset.
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TAXPACK 2010
WORKSHEET 2 Working out your child-housekeeper tax offset Column1 Column2
No other With another dependent child dependent child or student or student Dailyrate Ifyouhadachild-housekeeperforthewholeyearandyouwere noteligibleforFTBPartBatanytimeduringtheyear,write: n$1,828at(d)ifyouusecolumn 1,or n$2,190at(d)ifyouusecolumn 2. Thencontinuefromthere. Ifyouhadachild-housekeeperforonlypartoftheyearandyou were noteligibleforFTBPartBatanytimeduringthatperiod: nworkouthowmanydaysduringtheyearyouhad achild-housekeeper nmultiplythisnumberbytheappropriatedailyrate nwritetheanswerat(a)intheappropriatecolumn. IfyouwereeligibleforFTBPartBatanytime duringtheyear: nworkouthowmanydaysduringtheyearyou hadachild-housekeeperandyouwerenot eligibleforFTBPartB nmultiplythisnumberbytheappropriatedailyrate nwritetheanswerat(b)intheappropriatecolumn. IfyouwereeligibleforFTBPartBatthe shared-carerateatanytimeduringtheyear,work through(p)to(s)below.(IfyourFTBshared-care percentagechangedduringtheyear,workthrough (p)to(s)foreachperioditwasdifferent.) nWorkoutthenumberofdaysyouhadachildhousekeeperandyouwereeligibleforFTBPartB attheshared-carerate.Writetheanswerat(p). nMultiplythenumberofdaysfrom(p)bythe appropriatedailyrate.Writetheanswerat(q). nTakeyourFTBshared-carepercentageaway from100%andwritetheanswerat(r). nMultiplytheamountfrom(q)bythepercentage from(r)andwritetheanswerat(s). Writetheamountfrom(s)at(c)intheappropriate column.IfyourFTBshared-carepercentage changedduringtheyear,adduptheamounts from(s)andwritethetotalat(c).
TAXPACK 2010
$5.01
$6.00
(a)
(a)
(b)
(b)
(p) $ (q) % (r) $ (s)
(c)
(c)
63
Working out your child-housekeeper tax offset (continued) Column1 Column2
No other With another dependent child dependent child or student or student Add(a),(b)and(c).Writetheanswerat(d). Theamountat(d)isyourmaximum child-housekeepertaxoffset.Itcannotbe morethan$1,828ifitisincolumn 1or$2,190 ifitisincolumn 2. Writeyourchild-housekeepersATIfortheperiodyouareclaiminga child-housekeepertaxoffsetatVitemT1onpage5ofyourtaxreturn. Donotshowcents.Ifyourchild-housekeeperdidnothaveanyATI, write0. Ifyourchild-housekeepersATIwaslessthan$286,theamountat(d) isyourchild-housekeepertaxoffset.WritethisamountatPitemT1 onpage5ofyourtaxreturn,thengotostep4. Ifyourchild-housekeepersATIwas$286ormorefortheperiodyou maintainedthemthendeduct$282fromtheirATIfortheperiodyou areclaimingachild-housekeeperstaxoffsetanddividetheamount remainingby4. Writetheanswerintheappropriatecolumnat(e). Take(e)awayfrom(d).Writetheanswerinthe appropriatecolumnat(f). Step 2 Ifyoualsowanttoclaimahousekeepertaxoffsetgo topartCofAnswering this questiononpage59. Otherwiseaddtheamountat(f)fromworksheet 2to theamountat(f)fromworksheet 1ifyouusedit. Step 3 Writeyourtotalfromstep2atPitemT1onpage5 ofyourtaxreturn. Step 4 PrintoneofthefollowingcodelettersintheCLAIM TYPEboxattherightofPitemT1: Wifyouareclaimingachild-housekeepertaxoffset andyouhad nodependentchildorstudent(you usedcolumn1)
(d)
(d)
$ $
(e) (f)
$ $
(e) (f)
Hifyouareclaimingachild-housekeepertaxoffset andyouhadadependentchildorstudent(you usedcolumn2) Cifyouareclaimingaspousetaxoffsetforpartof theyearandachild-housekeepertaxoffsetfor anotherpartoftheyear. Step 5 CompletetheincometestitemsIT1toIT7onpage8 ofyourtaxreturn.Ifyouhadaspouse,youmust alsocompleteSpouse details married or de facto onpages911ofyourtaxreturn.Youneedto completeO,S,Q,A,B,C,DandE onpage10.
64
TAXPACK 2010
Part C Housekeeper Ifyouareeligibletoclaimahousekeepertaxoffset, useworksheet 3toworkoutyourtaxoffsetamount.
Step 1 Complete worksheet 3. Toclaimthehousekeepertaxoffset,youmustfirst determinewhichcolumntouseinworksheet 3.
WORKSHEET 3 Working out your housekeeper tax offset Column1 No dependent child or student Dailyrate $5.01 Column2 With a dependent child or student $6.00
Ifyouareeligibleforahousekeepertaxoffsetforthewholeyearand: nneitheryounoryourspouse(duringanyperiodtheywereyourspouse) waseligibleforFTBPartBatanytimeduringtheyear, or nyourspousereceivedadisabilitysupportpensionforthewholeyear write$1,828at(d)ifyouusecolumn 1or$2,190ifyouusecolumn 2. Thencontinuefromthere. Ifyouareeligibleforahousekeepertaxoffsetforthewholeyear butdonotmeettheaboverules: nworkoutthetotalnumberofdaysduringtheyearthat neitheryounoryourspouse(duringanyperiodtheywere yourspouse)waseligibleforFTBPartB,or either youoryourspouse(duringanyperiodtheywere yourspouse)waseligibleforFTBPartB,butyourspouse wasreceivingadisabilitysupportpension nmultiplythenumberofdaysbytheappropriatedailyrate nwritetheanswerat(a)intheappropriatecolumn. Ifyouareeligibleforahousekeepertaxoffsetforonlypartoftheyear: nworkoutthenumberofdaysduringthatpartoftheyearthat: neitheryounoryourspouse(duringanyperiodtheywere yourspouse)waseligibleforFTBPartB,or eitheryouoryourspouse(duringanyperiodtheywereyour spouse)waseligibleforFTBPartB,butyourspousewas receivingadisabilitysupportpension nmultiplythenumberofdaysbytheappropriatedailyrate nwritetheanswerat(b)intheappropriatecolumn.
(a)
(a)
(b)
(b)
TAXPACK 2010
65
Working out your housekeeper tax offset (continued) Column1 No dependent child or student Dailyrate If,foranyperiodduringtheyear,youdidnothave aspousereceivingadisabilitysupportpensionand youareeligibleforahousekeepertaxoffset,work through(p)to(s)below.(IfyourFTBshared-care percentagechangedduringtheyear,workthrough (p)to(s)foreachperioditwasdifferent). nWorkoutthenumberofdaysduringthatperiod thatyouoryourspouse(duringanyperiodthey wereyourspouse)waseligibleforFTBPartB atashared-carerate.Writetheanswerat(p). nMultiplythenumberofdaysfrom(p)bythe appropriatedailyrate.Writetheanswerat(q). nTakeyourFTBshared-carepercentageaway from100%andwritetheanswerat(r). nMultiplytheamountfrom(q)bythepercentage from(r)andwritetheanswerat(s). Writetheamountfrom(s)at(c)intheappropriate column.IfyourFTBshared-carepercentage changedduringtheyear,adduptheamounts from(s)andwritethetotalat(c). Add(a),(b)and(c).Writetheanswerat(d). Theamountat(d)isyourhousekeepertaxoffset. Itcannotbemorethan$1,828incolumn 1or $2,190incolumn 2. Step 2 Addtheamountat(d)fromworksheet 3tothe amountsat(f)fromworksheets 1and2ifyou usedthem. WriteyourtotalatPitemT1onpage5ofyour taxreturn. Step 3 PrintoneofthefollowingcodelettersintheCLAIM TYPEboxattherightofPitemT1: Wifyouareclaimingahousekeepertaxoffsetand youhadnodependentchildorstudent Hifyouareclaimingahousekeepertaxoffsetand youhadadependentchildorstudent $ (d) $ (d) $5.01 Column2 With a dependent child or student $6.00
(p)
(q) % (r)
(s)
(c)
(c)
Cifyouareclaimingadependentspousetaxoffset forpartoftheyearandachild-housekeepertax offsetforanotherpartoftheyearoraspouse taxoffsetandahousekeepertaxoffsetforthe sameperiod. Step 4 CompletetheincometestitemsIT1toIT7onpage8 ofyourtaxreturn.Ifyouhadaspouse,youmust alsocompleteSpouse details married or de facto onpages911ofyourtaxreturn.Youneedto completeO,S,Q,A,B,C,DandEonpage10.
66
TAXPACK 2010
Rebate income
Weworkoutwhatwecallrebateincometo determinewhetheryouareeligibleforeitherthe seniorAustralianstaxoffsetatT2orpensionertax offsetatT3. Yourrebateincomeisthetotalamountofyour taxableincomeplusthefollowingamountsifthey applytoyou: nadjustedfringebenefitsamount(totalreportable fringebenefitamountsmultipliedby0.535) nreportableemployersuperannuationcontributions ndeductiblepersonalsuperannuationcontributions nyournetfinancialinvestmentloss(theamountby whichyourdeductionsattributabletofinancial investmentsexceededyourtotalfinancial investmentincome) nyournetrentalpropertyloss(theamountbywhich yourdeductionsattributabletorentalproperty exceededyourrentalpropertyincome). Toworkoutyourrebateincome,usethefollowing worksheetorgotowww.ato.gov.auanduseour onlinecalculator.
WORKSHEET 1 Work out your rebate income Yourtaxableincome(from TAXABLE INCOME OR LOSS onpage4ofyourtaxreturn) Ifyourtaxableincome isaloss,write0at(a). Yourreportableemployer superannuationcontributions (fromT itemIT2onpage8 ofyourtaxreturn) Yourdeductiblepersonal superannuationcontributions (fromH itemD13 onpage15 ofyourtaxreturn) Yournetfinancialinvestment loss(fromXitemIT5 on page8ofyourtaxreturn) Yournetrentalpropertyloss (fromYitemIT6onpage8 ofyourtaxreturn) Youradjusted fringebenefitsamount MultiplytheamountfromW itemIT1onpage8ofyour taxreturnby0.535.Round downtothenearestdollar. Addupalltheamounts from(a)to(f).Thisisyour rebateincome. $ (a)
(b)
(c)
(d)
(e)
(f)
(g)
TAXPACK 2010
67
T2 Tax offsets
Senior Australians (includes age pensioners, service pensioners and self-funded retirees)
Ifyouhaveaspouseyoualsoneedtoworkout whethertheywereeligible.Seethedefinitionof spouseonpage123. Youcannotclaimthistaxoffsetifyouwereinjail forthewholeof200910. YoumaynotgettheseniorAustralianstaxoffset evenifyoumeetalltheeligibilityconditionsasthe amountofthetaxoffsetisbasedonyourindividual rebateincome,notyourcombinedrebateincome ifyouhaveaspouse. Workoutyourrebateincomeatrebate income onthepreviouspage.
YoucanclaimtheseniorAustralianstaxoffsetonly ifyoumeetallthefollowingconditionsrelatingto: nage nincome neligibilityforAustralianGovernmentpensions.
ANSWERINg THIS QUESTION Condition 1 Age Youmeetthisconditionif,on30June2010,youwere: namale aged65yearsoldorolder,or veteranorwarwidoweraged60yearsoldor olderwhomettheveteranpensionagetest or nafemale aged64yearsoldorolder,or veteranorwarwidowaged59yearsoldor olderwhomettheveteranpensionagetest.
Tofindoutwhetheryoumeettheveteranpension agetest,gotoMore informationonpage70. Doyoumeetcondition 1?
YES NO
Condition 2 Income Youmeetthisconditionifanyofthefollowing appliedtoyouin200910. nYoudidnothaveaspouse,andyourrebate incomewaslessthan$47,707. nYouhadaspouse,andthecombinedrebate income*ofyouandyourspousewaslessthan $76,992. nAtanytimeduringtheyearyouandyourspouse hadtoliveapartduetoillnessorbecauseone ofyouwasinanursinghome,andthecombined rebateincome*ofyouandyourspousewasless than$89,840.
*Combined rebate incomeincludesyourspousesshareof anynetincomeofatrustwhichthetrusteewasliabletopay taxonbecauseyourspousewasunderalegaldisability suchasunder18yearsoldon30June2010,wasabankrupt orwasapersonwhowasdeclaredlegallyincapablebecause ofamentalcondition.
Readcondition 2. Youarenoteligibleforthistaxoffset. GotoquestionT3.
Doyoumeetcondition 2?
YES NO
Readcondition 3. Youarenoteligibleforthistaxoffset. GotoquestionT3.
68
TAXPACK 2010
SeniorAustralians(includesagepensioners,servicepensionersandself-fundedretirees) T2
Condition 3 Eligibility for Australian government pensions and similar payments Youmeetthisconditionifanyofthefollowingthree criteriaappliedtoyouin200910.
A YoureceivedanAustralianGovernmentage pensionfromCentrelink,orapension,allowance orbenefitfromtheDepartmentofVeteransAffairs (DVA)atanytimeduring200910. IfAappliedtoyou,youmeetthiscondition.Goto Completing your tax return.Otherwise,readon. bYouwereeligibleforanAustralianGovernment agepensionduring200910butdidnotreceiveit becauseyoudidnotmakeaclaimorbecauseof theapplicationoftheincometestortheassets test,andyousatisfyoneofthefollowing: youhavebeenanAustralianresidentfor age-pensionpurposesforeither10continuous yearsorformorethan10yearsofwhichfive yearswerecontinuous youhaveaqualifyingresidenceexemption (becauseyouarrivedinAustraliaasarefugee orunderaspecialhumanitarianprogram) youareawomanwhowaswidowedinAustralia (atatimewhenbothyouandyourlatepartner wereAustralianresidents),youhavemade aclaimfortheagepensionandyouhadtwo yearsresidenceimmediatelybeforeyourclaim youreceivedawidowBpension,widowallowance, matureageallowanceorpartnerallowance immediatelybeforeturningage-pensionage youwouldqualifyunderaninternationalsocial securityagreement. IfBappliedtoyou,youmeetthiscondition.Goto Completing your tax return.Otherwise,readon. Ifyouneedassistanceindeterminingyoureligibility forasocialsecurityorCentrelinkpensiononly,phone Centrelinkon13 23 00.Forallotherenquiriesrelating totheseniorAustralianstaxoffset,phoneour IndividualInfoline(seetheinsidebackcover). CYouwereeligibleforapension,allowanceorbenefit fromVeteransAffairsduring200910butdidnot receiveitbecauseyoudidnotmakeaclaimor becauseoftheapplicationoftheincometestorthe assetstest,andyousatisfyeitherofthefollowing: youareaveteranwitheligiblewarservice,or youareaCommonwealthveteran,alliedveteran oralliedmarinerwithqualifyingservice.
Ifyouarenotsurewhetheryouwereeligiblefor apayment,youcangetfurtherinformationfrom theDVAwebsiteorbyphoningVeteransAffairs. IfCappliedtoyou,youmeetthiscondition. Doyoumeetcondition 3?

YES NO
GotoCompleting your tax returnbelow. Youarenoteligibleforthistaxoffset. GotoquestionT3.
COMPLETINg YOUR TAX RETURN Step 1 Workoutwhichofthefollowingcodelettersapplied toyourcircumstances.

SENIOR AUSTRALIANS TAX OFFSET CODE LETTERS Ifatanytimeduring200910,youwere single,separatedorwidowed,use Ifyouandyourspouse nwerebotheligibleforthesenior Australianstaxoffset,and natanytimein200910hadtoliveapart duetoillnessorlivedapartbecause oneofyouwasinanursinghome,use Ifyourspousewasnoteligibleforthe seniorAustralianstaxoffset,andatany timein200910youandyourspouse livedapartduetoillnessorbecauseone ofyouwasinanursinghome,use Ifyouandyourspouselivedtogether andyouwerebotheligibleforthesenior Australianstaxoffset,use Ifyouandyourspouselivedtogether,but yourspousewasnoteligibleforthesenior Australianstaxoffset,use A
Hadtoliveapartduetoillnessreferstosituations whereyouandyourspousedidnotlivetogether becauseoneorbothofyouhaveanindefinitely continuingillnessorinfirmityand,asaresultyour combinedlivingexpenseswereincreased. Ifonlyonecodeletteraboveapplied,gotostep2.
TAXPACK 2010
69
T2 SeniorAustralians(includesagepensioners,servicepensionersandself-fundedretirees)
Ifmore than onecodeletterapplied,usethefirst codeletterinthelistonthepreviouspagethatapplied toyou,exceptasshowninthefollowingtable. IfbothAandBapplied,andyourspouses rebateincomewaslessthan$18,334,use IfbothAandCapplied,andyourspouse receivedanAustralianGovernment paymentlistedatquestion6 Australian Government pensions and allowances, andyourspousesrebateincomewasless than$20,494,use IfbothAandDapplied,andyourspouses rebateincomewaslessthan$12,494,use IfbothAandEapplied,andyourspouse receivedanAustralianGovernment paymentlistedatquestion6 Australian Government pensions and allowances, andyourspousesrebateincomewasless than$13,687,use B
Step 4 Youmustreadpages1016and,whereapplicable, completeincometestsitemsIT1, IT2, IT5and IT6andfordeductiblepersonalsuperannuation contributionsitemD13ontheTax return for individuals (supplementary section) 2010. Step 5 IfyourseniorAustralianstaxoffsetcodeletterisA gotoquestionT4.IfyourseniorAustralianstax offsetcodeletterisB,C,DorE,youmust completeSpouse details married or de facto onpages911ofyourtaxreturn.
Any unused portion of tax offset IfyouareeligiblefortheseniorAustralianstaxoffset andyourspouseiseligibleforeitherthesenior Australianstaxoffsetorpensionertaxoffset,and oneofyoudoesnotfullyuseyourtaxoffset,the unusedportionmaybeavailablefortransfertothe otherperson.Wewillworkthisoutautomatically andtransferanyentitlement. MORE INFORMATION Youmeettheveteran pension age testifoneof thefollowingappliedtoyouandyouwereeligiblefor apension,allowanceorbenefitundertheVeterans Entitlements Act 1986. nYouhaveeligiblewarservice,thatis,servicein WorldWarIIoroperationalserviceasamember oftheAustralianDefenceForce. nYouareaCommonwealthoralliedveteranwho servedinaconflictinwhichtheAustralianDefence Forcewasengagedduringaperiodofhostilities, thatis,WorldWarII,orinKorea,Malaya,Indonesia orVietnam. nYouareanAustralianoralliedmarinerwhoserved duringWorldWarII. nYouarethewarwidoworwidowerofaformer memberoftheAustralianDefenceForce.
Pension,allowanceorbenefitincludes: ndisabilitypension nservicepension,and nwhiteorgoldRepatriationhealthcardsfor treatmententitlements. Ifyouarenotsureifyoumeettheveteranpension agetest,visittheDVAwebsiteatwww.dva.gov.au orphoneVeteransAffairson13 32 54.
Step 2 PrintyourcodeletterintheTAX OFFSET CODEbox atNitemT2. Wewillworkouttheamountofyourtaxoffset. Ifyouwanttoworkitout,youcanusethesenior Australiansandpensionertaxoffsetcalculatorat www.ato.gov.au/calculators Step 3 Ifyouoryourspousewasaveteran,warwidow orwarwidower,readonandworkoutyourveteran code letter;otherwise,gotostep4. Selectthecodeletterthatappliestoyou. VETERAN CODE LETTERS Ifyouwereaveteran,warwidoworwar widower,use Ifyourspousewasaveteran,warwidow orwarwidower,use IfbothVandWapplytoyou,use V W X
Ifaveterancodeletterappliestoyou,printthecode letterintheVETERAN CODEboxatYitemT2. Otherwise,leaveitblank.
70
TAXPACK 2010
Pensioner
Tax offsets T3
Did you show an Australian government pension or allowance at item 6 on your tax return?
NO YES
IfyouhavealreadyclaimedataxoffsetatitemT2, gotoquestionT4,becauseyoucannotalsoclaim thistaxoffset.
The definition of spouse now covers same-sex relationships. See the definition of spouse on page 123. COMPLETINg YOUR TAX RETURN Step 1 Workoutwhichofthefollowingcodelettersapplied toyourcircumstances.
PENSIONER TAX OFFSET CODE LETTERS If,atanytimeduring200910,whileyouwere receivinganAustralianGovernmentpensionor allowancelistedatquestion6: youweresingle,widowedorseparated,use youandyourspouselivedtogether,use youandyourspousehadtoliveapartdue toillnessoryoulivedapartbecauseoneof youwasinanursinghome,use S P I
Wewillworkouttheamountofyourtaxoffset. Ifyouwanttoworkitout,youcanusethesenior Australiansandpensionertaxoffsetcalculatorat www.ato.gov.au/calculators Step 3 Ifyouoryourspousewasaveteran,warwidowor warwidower,youneedtoworkoutyourveteran code.Selectthecodeletterthatappliestoyou. VETERAN CODE LETTERS Ifyouwereaveteran,warwidoworwar widower,use Ifyourspousewasaveteran,warwidowor warwidower,use IfbothVandWapplytoyou,use V W X
Ifaveterancodeletterappliestoyou,printthe codeletterintheVETERAN CODEboxatTitemT3. Otherwise,leaveitblank. Step 4 IfyourpensionertaxoffsetcodeletterwasS, youmustreadpages101106andwhereapplicable, complete Income testsitemsIT1,IT2andIT5and IT6.ThengotoquestionT4. Step 5 IfyourpensionertaxoffsetcodeletterwasP,I,J orQ,youmustreadpages1016and,where applicable,completeIncome testsitemsIT1,IT2 andIT5andIT6.Thenreadpages1079and completeSpouse details married or de facto onpages911ofyourtaxreturn.
Hadtoliveapartduetoillnessreferstosituations inwhichyouwerepaidapensionatahigherrate becauseyouandyourspousedidnotlivetogether inyourhomeduetoillness.Ifyouarenotsure,check withCentrelinkortheDepartmentofVeteransAffairs. Ifonlyonecodeletteraboveapplied,gotostep2. Ifmorethanonecodeletterapplied,usethefollowing codeletter. IfbothPandIappliedtoyou,use IfS,PandIallappliedtoyou,use IfbothSandIappliedtoyou,use IfbothSandPappliedtoyou,use Step 2 Printyourpensionertaxoffsetcodeletterinthe TAX OFFSET CODEboxatOitemT3.
TAXPACK 2010
I J J Q
ANY UNUSED PORTION OF TAX OFFSET Ifyouareeligibleforthepensionertaxoffsetandyour spouseiseligibleforeithertheseniorAustralianstax offsetorpensionertaxoffset,andoneofyoudoesnot fullyuseyourtaxoffset,theunusedportionmaybe availablefortransfertotheotherperson.Wewillwork thisoutautomaticallyandtransferanyentitlement.
71
T4 Tax offsets
Australian superannuation income stream
IfyouhaveshownincomefromanAustralian superannuationincomestreamatitem7onyourtax return,youmaybeentitledtoataxoffsetequalto n15%ofthetaxedelement,or n10%oftheuntaxedelementofyoursuperannuation incomestreambenefit. ThetaxoffsetamountwillbeshownonyourPAYG payment summary superannuation income stream. Youarenotentitledtoataxoffsetforthetaxed elementofanysuperannuationincomestream youreceivedbeforeyouturned55yearsoldunless thesuperannuationincomestreamwaseither: nadisabilitysuperannuationbenefit,or nadeathbenefitincomestream.
Youarenotentitledtoataxoffsetfortheuntaxed elementofanysuperannuationincomestream receivedbeforeyouturned60yearsoldunlessthe superannuationincomestreamisadeathbenefit incomestreamandthedeceaseddiedafterthey turned60yearsold.
Did you receive an Australian superannuation income stream shown on a PAYG payment summary superannuation income stream?
NO YES
ANSWERINg THIS QUESTION Youwillneed: nyourPAYG payment summary superannuation income streamwhichshouldshowtheamount ofthetaxoffset.
Contactyourpayerifyou: ndidnotreceiveapaymentsummaryoryoulost yourpaymentsummary nthinkyouqualifyforthistaxoffsetandthepayment summarydoesnotshowit ndisagreewiththeamountshownonyourpayment summary. Alternatively,seeourwebsiteforfurtherinstructions ifyouareentitledtoataxoffsetandyourPAYG payment summary superannuation income stream doesnotshowataxoffsetamount.
COMPLETINg YOUR TAX RETURN Step 1 Addupthetaxoffsetsthatareeithershownon asuperannuationincomestreampaymentsummary orworkedoutbyyou.

Step 2 WritethetotalatSitemT4.
MORE INFORMATION Formoreinformationonhowthistaxoffsetisworked out,seeSpecial circumstances and glossaryon page121.
72
TAXPACK 2010
Private health insurance
Tax offsets T5
Youcanclaimaprivatehealthinsurancetaxoffset ifyoupaidapremiumforacomplyingprivatehealth insurancepolicyoryouremployerpaidthispremium onyourbehalf. Yourhealthinsurancepolicyiscomplyingif: nitisprovidedbyaregisteredhealthinsurer nitprovideshospitalorgeneral(alsoknownas extras)coverorcombinedhospitalandgeneral cover,and nitmeetsothercomplyingprivatehealthinsurance policyrequirementsifyouarenotsureyour healthinsurercantellyouifyourpolicymeets theseconditions. ThePrivateHealthInsuranceAdministrationCouncil websiteatwww.phiac.gov.aucantellyouifyour insurerisaregisteredhealthinsurer.
Did you, or your employer on your behalf, pay a premium for a complying private health insurance policy?
NO YES
Checkthestatementsfromallofthehealthinsurers youpaidpremiumsto.IftheamountsatGonyour statementsare$0,youhavealreadyreceivedyour fullentitlementandyoudonotneedtocomplete thisitem.GotoquestionT6. Ifyouhaveanamountgreaterthan$0atG, readbelow.
ANSWERINg THIS QUESTION Youwillneedastatementfromyourregistered healthinsurer.

Ifyoudidnotreceiveastatement,contactyour insurer.Ifyoudonothaveastatementbecause youremployerpaidthepremium,contactyour insureroremployer. Ifyoucannotgetastatementfromyourhealth insurer,orifyourstatementshowsatotalamount expectedtobepaidduringtheyearwhichisdifferent tothetotalamountactuallypaid(forexample,you didnotmakeoneoftheexpectedpayments),you willneedtocalculateyourtaxoffsetyourself.Go towww.ato.gov.auandsearchforPrivatehealth insurancerebate,thenselectCalculatingyour rebate.Useoneofthetwoworksheetstohelp youworkoutwhatyoucanclaim. Youcannotclaimthistaxoffsetforpremiums paidifyouhavealreadyclaimedaprivatehealth insurancerebateforthem,eitherasreductionsin yourpremiumsthroughthehealthinsurerorascash orchequerebatesfromMedicare.
COMPLETINg YOUR TAX RETURN Step 1 AddupalltheamountsshownatG onyour statements.

Step 2 Deductanycashorchequerebatesyoureceived fromMedicareforyourprivatehealthinsurance premiums. Step 3 Iftheresultfromstep2is$0oranegativeamount, youhavealreadyreceivedyourfullentitlement. Iftheresultfromstep2isgreaterthan$0,writethe amountatGitemT5. Ifyouandanotherpersonmadepaymentsforthe samepolicy(forexample,fromajointbankaccount) youcaneachclaimtheproportionoftheamountyou workedoutatstep2thatreflectstheamountofthe premiumsthatyoupaid.
TAXPACK 2010
73
T6 Tax offsets
Education tax refund
Youmaybeeligiblefortheeducationtaxrefund(ETR) ifyou,oryourpartner,incurredeligibleeducation expensesbetween1July2009and30June2010 fortheprimaryorsecondaryschoolstudies(atschool, homeorTAFE)of: nachild,or nyourself,ifyouwereanindependentstudent under25yearsoldundertakingprimaryor secondarystudies. Forthepurposeofthisquestion,yourpartneris apersonofthesameoroppositesex: nwithwhomyouarelegallymarriedorinamarriage-like relationship nfromwhomyouarenotpermanentlyseparated,and nwhoisnotblood-related,relatedbyadoptionor undertheageofconsent. Youincuranexpenseintheincomeyearwhen: nyoureceiveabillorinvoiceforanexpensethat youareliableforandmustpay(evenifyoudont payituntilaftertheendoftheyear),or nyoudonotreceiveabillorinvoicebutyouare chargedandyoupayfortheexpense.
Youcanclaimcarry-forwardexcesseligibleeducation expensesfromlastyearonlyifyouareeligibleforthe ETRinrespectofeligibleeducationexpensesincurred thisyear. ForyoutobeeligibletoclaimtheETRforan expenseforastudent,theexpensemustbean eligible education expense,andwhentheexpense wasincurred: nyoumusthavemetoneofthefourconditions below,and nthestudentmusthavemettheschooling requirement. See: npage75foralistofeligible education expenses npage75forschooling requirement nbelowforinformationonthefourconditions.
Do you want to claim the ETR?

NO YES
Youmustmeetoneofthefourfollowingconditions foreachstudentforwhomyouwanttoclaimtheETR.
CONDITION 1: RECEIVINg FAMILY TAX bENEFIT (FTb) PART A On the day you or your partner incurred the expense in respect of the child, were you eligible to receive FTB Part A for that child?
Ifyouarenotsurewhetheryouwereeligibleto receiveFTBPartAforthatchild,contacttheFamily AssistanceOffice(seetheinsidebackcover).
YES
CONDITION 2: RECEIVINg PAYMENTS OTHER THAN FTb Youmetthisconditionif,onthedayyouoryour partnerincurredtheexpenseinrespectofthechild, thatchildwasnotyourFTB child(seethedefinition onpage79)onlybecauseoneofthesepayments waspaidforthechild1: nasocialsecuritypensionorbenefit naLabourMarketProgrampayment,or naprescribededucationalschemepayment.
Did you meet this condition?
YES
GotoSchooling requirement onthenextpage. ReadCondition 2: Receiving payments other than FTB.
GotoSchooling requirement onthenextpage. ReadCondition 3: Child stops school.
NO
NO
1
Thesepaymentsinclude: YouthAllowance disabilitysupportpension ABSTUDYlivingallowance paymentsundertheVeteransChildrenEducationScheme paymentsundertheschemetoprovideeducationandtraining underthe Military Rehabilitation and Compensation Act 2004. Ifyouarenotsurewhetherapaymentforthechildisoneof thesetypesofpayment,contactthepayer.
TAXPACK 2010
74
Educationtaxrefund T6
CONDITION 3: CHILD STOPS SCHOOL Youcanmeetthisconditionforthechildonlyif: nonthedayyouoryourpartnerincurredtheexpense inrespectofthechild,thechildwas16yearsor olderandmettheschoolingrequirement nthechildwasnotundertakingprimaryorsecondary schoolstudieson30June2010,and nyouwouldhavesatisfiedcondition1or2for thechildonthedaytheexpensewasincurred ifthechildhadearnednoincomeinthe200910 incomeyear.
IfallthesecriteriaaresatisfiedtheCommissioner willacceptthatyouhavemetcondition3when youoryourpartnerincurredtheexpense. Did you meet this condition?
YES
SCHOOLINg REQUIREMENT Ifthestudentwasenrolledorregisteredinaprimary orsecondaryschoolcourse(atschool,homeor TAFE)andattendedthatcourse,orreceivedthe homeschooling,foratleastoneday: nbetween1July2009and31December2009,then theymettheschoolingrequirementforeverydayin thatperiod nbetween1January2010and30June2010,then theymettheschoolingrequirementforeveryday inthatperiod nineachofthosetwosix-monthperiods,thenthey mettheschoolingrequirementforthewholeyear.
Did the student meet the schooling requirement?
NO
GotoSchooling requirementinthe nextcolumn. ReadCondition 4: Independent student.
Youarenoteligibleforthistaxoffset. GotoquestionT7. Readbelow.
YES
NO
CONDITION 4: INDEPENDENT STUDENT Youmetthisconditionif,onthedayyouincurredthe expense,youwereunder25yearsoldand: nyouwerereceivingasocialsecuritypensionor benefit,aLabourMarketProgrampaymentor aprescribededucationalschemepayment* nyoumettheindependencerequirementsfor thepayment nyouwereanAustralianresident(undertheSocial Security Act 1991)oraspecialcategoryvisaholder (undertheMigration Act 1958) nyouwereresidinginAustralia,and nnooneelse,suchasyourparentoranapproved careorganisation,wasentitledtotheETRforyou.
Did you meet this condition?
YES
GotoSchooling requirementinthe nextcolumn. Youarenoteligibleforthistaxoffset. Gotoquestion T7.
EDUCATION EXPENSES Thefollowingareeligible education expensesif theyrelatedirectlytotheeducationofthestudent forwhomyouareclaimingtheETR: nlaptops,homecomputers,repairandassociated runningcosts ncomputer-relatedequipment,suchasprinters,USB flashdrives,aswellasdisabilityaidstoassistinthe useofcomputerequipmentforstudentswith specialneeds,repairandassociatedrunningcosts nhomeinternetconnection,includingthecostsof establishingandmaintainingit ncomputersoftware,forexample,wordprocessing, spreadsheetandpresentationsoftware nschooltextbooksandotherpaper-basedschool learningmaterial,includingprescribedtextbooks, associatedlearningmaterials,studyguidesand stationery ntoolsoftrade,suchastoolsrequiredtocomplete aschool-basedapprenticeship.
Thefollowingarenot eligible expensesfortheETR: nschoolfees nschooluniformexpenses nstudentattendanceatschoolexcursionsand camps ntutoringcosts nsportingequipment nmusicalinstruments nlibrarybookfees
NO
* Thesepaymentsinclude: YouthAllowance disabilitysupportpension ABSTUDYlivingallowance paymentsundertheVeteransChildrenEducationScheme paymentsundertheschemetoprovideeducationandtraining underthe Military Rehabilitation and Compensation Act 2004. Ifyouarenotsurewhetherapaymentforthechildisoneof thesetypesofpayment,contactthepayer.
TAXPACK 2010
75
T6 Educationtaxrefund
nbuildinglevies nschoolsubjectlevies nschoolphotos ndonations ntuckshopexpenses nwaitinglistfees ntransport nmembershipfees ncomputergamesandconsoles.
Completing worksheet 1 Completeworksheet 1toworkoutthemaximum ETRyoucanclaim(yourETRlimit).

Ifyouwereanindependentstudent,useanycolumn intheworksheetanddisregardanyinstructionthat relatestoachild. Ifyouhavemorethanfivechildrenforwhomyouwant toclaimtheETR,useaseparatepieceofpaperto continueyourcalculations. Step 1 Forastudentwhoattendedsecondaryschoolona dayduring200910,write$779at(a).Forastudent whoattendedonlyprimaryschoolduring200910, write$390at(a). Step 2 Writeat(b),foreachstudent,thenumberofeligible days,thatis,dayswhen: nyoumetanyofthefourconditionsonpages745 withrespecttothestudentand nthestudentmettheschoolingrequirement. Ifbothoftheabovedotpointsaresatisfiedforthe wholeincomeyear,write365at(b). Step 3 nIfyoumetcondition4,write1at(c). nIfyoumetcondition1andhadanFTBagreed percentage,writethispercentageat(c)asadecimal (forexample,write0.65not65%). nIfbothyouandyourpartnermetcondition2or3, andyoudonothaveawrittenagreementwithyour partner,youragreedpercentageis50%.Write0.5 at(c). nOtherwise,youragreedpercentageis100%. Write1at(c). Step 4 nIfyoumetcondition4,write1at(d). nIfyouandyourpartnerdid not share the careof thechildwithsomeoneelse,write1at(d). nIfyoumetcondition1,writeyourFTBshared-care percentageforthechildat(d)asadecimal. nIfyoumetcondition2or3,workoutthenumber ofdaysthatthechildwaswithyouandyourpartner during200910thatwerealsoeligibledays(see step2).Dividethatnumberbythenumberof eligibledaysat(b)andwritetheanswerat(d).
Youcannotclaimforanexpense,orthatpartof anexpense: nthatistaxdeductible nthatissubjecttoanothertaxoffset,or nforwhichyoureceivedorareentitledtoreceive areimbursementorpaymentundera Commonwealthbenefit,grantorsubsidy. Were the expenses you want to claim eligible education expenses?
YES NO
GotoAnswering this questionbelow. Youarenoteligibleforthistaxoffset. GotoquestionT7.
ANSWERINg THIS QUESTION Usethefollowingstepsandworksheetstocalculate yourETR,orgotowww.ato.gov.auandusetheETR calculatorthere.

IfyouareanindependentstudentgotoCompleting worksheet 1. Beforeyoucanworkouthowmuchyoucanclaim, youneedtoknowwhetheryouhadanFTBagreed percentageoranFTBshared-carepercentagefor thechild. Ifbothyouandyourpartnermetcondition2or3, youcanmakeawrittenagreementwithyourpartner statingwhichofyouwillclaimtheETR.Otherwise, youwilleachhavetoclaimhalftheETR. YouhavetousetheETRcalculatoratwww.ato.gov.auif: nyouhadanFTBshared-careorFTBagreed percentagethatchangedduringtheyear nyoumetcondition1forachildduringpartofthe incomeyearandyoumetcondition2or3forthe samechildduringanotherpartoftheincomeyear, or nyouandyourpartnermetcondition2or3unless youhadawrittenagreementthatoneofyou wouldclaimtheETRforeverydayintheyear,or youdidnothaveawrittenagreementatall.
76
TAXPACK 2010
WORKSHEET 1 Working out your ETR limit Child1 Amountfromstep1 Numberofeligibledays Agreedpercentage Shared-carepercentage Multiply(b),(c)and(d). Divide(e)by365(round totwodecimalplaces). Multiply(a)by(f). $ $ $ Child2 $ $ Child3 $ $ Child4 $ $ $ Child5 $ (a) (b) (c) (d) (e) (f) (g) (h)
Addupalltheamountsat(g)androunduptothenextdollar.
Theamountat(h)isyourETRlimit.
Otherwise,readon. Step 6 Addupalltheeligibleexpensesthatyouand yourpartnerincurredwhenyoumetcondition1. Writethetotalat(j)inworksheet 2. Writeat(k)inworksheet 2yourFTBagreed percentagefrom(c)inworksheet 1. Addupandwriteat(m)inworksheet 2alltheeligible expensesthatyouandyourpartnerincurredwhen: nyoubothmetcondition2or3,and nyoudidnothaveawrittenagreementwithyour partneridentifyingwhowouldclaimETR. Addupandwriteat(o)inworksheet 2alltheeligible expensesthatyouandyourpartnerincurredwhen: nyoubothmetcondition2or3,and nyouhadawrittenagreementwithyourpartner thatyouwouldclaimtheETR.
Work out the total eligible expenses you can claim ETR for Eligibleexpensesareeligibleeducationexpenses youincurredatatimewhen: nyoumetcondition1,2,3or4,and nthestudentmettheschoolingrequirement.
Step 5 Ifyouwereanindependentstudent,addupall youreligibleexpensesandwritethetotalat(p)in worksheet 2.Ignorerows(j)to(o).Writeanyexcess eligibleexpensescarriedforwardfrom200809at(q) andcomplete(r)and(s).Gotostep7. Ifyouweresingleforthewholeincomeyearand youdidnotsharethecareofthechild,addupall theeligibleexpensesthatyouincurredwhenyou metcondition1,2or3.Writethetotalat(p)in worksheet 2.Ignorerows(j)to(o).Writeanyexcess eligibleexpensescarriedforwardfrom200809at(q) andcomplete(r)and(s).Gotostep7.
TAXPACK 2010
77
T6 Educationtaxrefund
WORKSHEET 2 Working out the total expenses you can claim ETR for Yourexpensesunder condition1 YourFTBagreedpercentage Multiply(j)by(k). Yourexpensesunder condition2or3without awrittenagreement Divide(m)by2. Yourexpensesunder condition2or3with awrittenagreement Add(l),(n)and(o). Yourexcesseligibleexpenses carriedforwardfrom200809 Add(p)and(q). Divide(r)by2androundupto thenextdollar. $ $ (j) (k) (l)
Work out the excess eligible expenses you can carry forward to 201011 Step 8
WORKSHEET 3 Working out the excess eligible expenses Transfer(s)fromworksheet 2. Transfer(h)fromworksheet 1. Take(h)awayfrom(s). $ $ $ $ (s) (h) (t) (u)
$ $
(m) (n)
Multiply(t)by2.
(o) (p) (q) (r) (s)
Iftheamountat(u)inworksheet 3islessthanthe amountat(p)inworksheet 2,thentheamountat(u) istheamountyoucarryforwardandincludeinyour totaleligibleeducationexpenseswhenworkingout yourETRfor201011,providedyouarestilleligible toclaimETRinthatyear.Keeparecordofthe amountat(u). Iftheamountat(u)inworksheet 3isgreaterthanthe amountat(p)inworksheet 2,thentheamountat(p) istheamountyoucarryforwardandincludeinyour totaleligibleeducationexpenseswhenworkingout yourETRfor201011,providedyouarestilleligible toclaimETRinthatyear.Keeparecordofthe amountat(p).
Theamountat(s)isthemaximumamountofeligible educationexpensesyoumayclaim.
Work out the amount of your ETR Step 7 Transfertheamountfrom(h)inworksheet 1or(s)in worksheet 2,whicheverisless,toLitemT6.
Ifyoutransferredtheamountfrom(s)inworksheet 2 toLitemT6,gotostep9.Otherwise,readon.
Number of students Step 9 Addupthenumberofprimaryschoolstudents youareclaimingETRforandwritetheanswerat WitemT6.

Step 10 Addupthenumberofsecondaryschoolstudents youareclaimingETRforandwritetheanswerat XitemT6.
78
TAXPACK 2010
DEFINITION OF FTb CHILD AchildwillbeyourFTBchildwhen: nthefollowingcriteriaaremet,and nthechildisnotpreventedfrombeingyourFTB childbythenegativetest(seethenextcolumn).

Theremaybeothersituationsinwhichachildwill beyourFTBchild.Ifindoubt,contacttheFAO.
Ifthechild is 5 years old or older and under 16 years old,andtheyarenotstudyingfulltime orengagedinacourseofprimaryeducation, theiradjustedtaxableincome(ATI)mustbeless than$12,742. Ifthechild is 16 years old or older and under 21 years old: n theirATImustbelessthan$12,742 n thechild,orsomeoneontheirbehalf,must notreceiveanypaymentsunderaprescribed educationalschemeforthechild,and n forthepurposesoftheeducationtaxrefund,the childmustalsofrom1January2010: havecompletedthefinalyearofsecondaryschool oranequivalentqualification,or beundertakingfull-timestudyinanapproved coursethat,intheopinionoftheFAO,willassist orallowthechildtocompletethefinalyearof schooloranequivalentqualification. Ifthechild is 21 years old or older and under 25 years old: n thechildmustbeundertakingfulltimestudy n theirATImustbelessthan$12,742,and n thechild,orsomeoneontheirbehalf,must notreceiveanypaymentsunderaprescribed educationalschemeforthechild. ForanexplanationofATIanditscomponents, gototheFamilyassistanceguideat http://www.fahcsia.gov.au/guides_acts/fag/ faguide-3/faguide-3.2.html
basic criteria n Thechildmustbeinyourcare(seenegativetest).

Thechildmustbe: anAustralianresident,or aspecialcategoryvisaholderresiding inAustralia,or livingwithyouandyoumustbeanAustralian residentoraspecialcategoryvisaholder.
n Thechild,orsomeoneontheirbehalf,mustnot
receiveanysocialsecuritypensionorbenefit orLabourMarketProgrampaymentforthechild. n Thechildmustbeunder25yearsold. Thechildeither: n mustnotbeyourpartner,or n ifthechildisunder16yearsold,thechildwould notbeyourpartnereveniftheywereovertheage ofconsentinyourstateorterritory. ContacttheFAOaboutthefollowingsituationswhen achildmightstillbeyourFTBchild: n Thechildistakenoutofyourcarewithout yourconsent. n YouorthechildisnotinAustralia. n Thechildisunder18yearsoldandfromanother relationshipofyourpartner.
Age-based criteria Ifthechild is under 18 years old,oneofthe followingcriteriamustbemet: n Youarelegallyresponsible(orjointlylegally responsiblewithanotherperson)fortheday-to-day care,welfareanddevelopmentofthechild. n Youareapersonwithwhomthechildissupposed toliveorspendtimeunderafamilylaworder, registeredparentingplanorparentingplanthat isinforceforthechild. n Thechildisnotinthecareofanyonelegally responsiblefortheirday-to-daycare,welfare anddevelopment.
The negative test Ifyousatisfythecriteriaaboveforachildonaday, thatchildisyourFTBchildonthatdayunlessall ofthefollowingconditionsapplyonthatday: n thechildisalsoanFTBchildofoneormoreother personwithwhomyousharethecareofthechild n youmadeaclaimforFTBinrespectofthechild forallorpartoftheincomeyear n youarenotthepartnerofsomeoneinrespect ofwhomthechildisanFTBchild,and n theFAOhasdeterminedthatyoucareforthechild forlessthan35%ofthetime.
Ifalltheconditionsaboveapply,thechildisnotyour FTBchild.
TAXPACK 2010
79
T Tax offsets
Tax offsets that you show on the supplementary section of the tax return
YouneedtouseTaxPack 2010 supplementifyou wereentitledtoanyofthefollowingtaxoffsets: ntaxoffsetforsuperannuationcontributionson behalfofyourspouse ntaxoffsetforlivinginaremoteorisolatedarea ofAustralia ntaxoffsetforservingoverseasasamemberof theAustralianDefenceForceoraUnitedNations armedforce ntaxoffsetfornetmedicalexpensesoverthe thresholdamount ntaxoffsetformaintenanceofyourparent, spousesparentorinvalidrelative nlandcareandwaterfacilitytaxoffsetbrought forwardfromanearlieryear
nmatureageworkertaxoffset nentrepreneurstaxoffset ntaxoffsetforinterestfromthelandtransport
facilitiestaxoffsetschemeorinfrastructure borrowingsscheme ntaxoffsetforperformingworkorservicesin theJointPetroleumDevelopmentArea(JPDA) nforeignincometaxoffset,whichyouclaimed atitem20.
Were you entitled to any of the above tax offsets?

NO YES
GotoTotal tax offsets. Readbelow.
ANSWERINg THIS QUESTION YoucanfindtheTax return for individuals (supplementary section) 2010atthebackof TaxPack 2010 supplement.Ifyoudonthavea copyofthissupplement,youcangetonefrommost newsagentsduringthelodgmentperiod(1Julyto 31October2010).Copiesarealsoavailableallyear fromourPublicationsDistributionService(seethe insidebackcover)andshopfronts.
COMPLETINg YOUR TAX RETURN Step 1 Completethedetailsatthetopofpage13onyour Tax return for individuals (supplementary section) 2010.UseTaxPack 2010 supplementtocomplete theTAX OFFSETSsectiononpage16ofyourtax return(supplementarysection).
Step 2 TransfertheamountyouwroteatTOTAL SUPPLEMENT TAX OFFSETSonpage16of yourtaxreturn(supplementarysection)toTon page5ofyourtaxreturn.
80
TAXPACK 2010
Total tax offsets
Tax offsets
COMPLETINg YOUR TAX RETURN Step 1 Checkthatyouhaveclaimedallthetaxoffsets youareeligiblefor.

Step 2 Addupallthetaxoffsetamountsyouclaimed atitemsT1,T4,T5,T6andTonyourtaxreturn. (WeworkouttheamountsatitemsT2andT3 automatically.) Step 3 WritethetotalamountatU TOTAL TAX OFFSETS onpage5ofyourtaxreturn.
Mature age worker tax offset IfyouwereanAustralianresident55yearsoldor olderon30June2010andyouhavereceivedcertain incomefromworking,youmaybeeligibleforthe matureageworkertaxoffset.

Ifyouhavenetincomefromworkingasaresultof amountsthatyoushowatitemsinthesupplementary sectionofthetaxreturn,youwillneedtocomplete itemT12 Net income from working supplementary sectionsowecanworkoutyourmatureageworker taxoffsetentitlement.
Adjustments that you show on the supplementary section of the tax return
COMPLETINg YOUR TAX RETURN Didyoureceiveadistributionduring200910on whichfamilytrustdistributiontaxhasbeenpaid?

YES
DidyoumakeapaymenttotheTaxOfficemorethan 14daysbeforetheduedateforpayment?
YES
ReadquestionA4onpages66in TaxPack 2010 supplement.Youmay beentitledtoanadjustment. Readon.
ReadquestionC1onpages67inTaxPack 2010 supplement.Youmaybeabletoclaim creditforinterestonearlypayments. GotoPrivate health insurance policy detailsonthenextpage.
NO
NO
TAXPACK 2010
81
Private health insurance policy details
Youneedtocompletethisitemifyouclaimedatax offsetatitemT5 Private health insuranceoryou weredirectedtoprovidethisinformationatquestion M2 Medicare levy surcharge.
Did you have private health insurance at any time from 1 July 2009 to 30 June 2010?
NO YES
GotoquestionM1. Readbelow.
YoumustcompleteitemM2 Medicare levy surchargeitiscompulsory.
ANSWERINg THIS QUESTION Youwillneedyourstatementsfromyourregistered healthinsurers.

Ifyoudidnotreceiveastatement,contactyour insurer.Ifyoudonothaveastatementbecause youremployerpaidthepremium,contactyour insureroremployer. Youmayhavebeencoveredbyafamilypolicy eventhoughyouoryouremployerdidnotpaythe premium.Youcanshowthetypeofcoveryouhad underthatpolicyatthisitem. HELPFUL HINT Youcandownloadyourprivatehealthinsurance detailsonlineanytimeusingthepre-fillingservice ine-tax.Gotowww.ato.gov.au/etaxprefilling
TYPE OF COVER Generalcover(alsoknown asextras) Hospitalcover Combinedhospitaland generalcover
CODE LETTER A H C
Ifyouchangedthecoverunderapolicyduringthe year,printthecodeletterforthehighestlevelofcover. Youhavefinishedthisquestion.GotoquestionM1. Step 4 Ifyouhadmorethanthreepoliciesduringthe year,completesteps1to3forthefirstthreepolicies. Then,onaseparatesheetofpaper,printSCHEDULE OFADDITIONALINFORMATIONPRIVATEHEALTH INSURANCEPOLICYDETAILS.Printyourname, addressandtaxfilenumber,andlistthehealth insurersIDcode,yourmembershipnumberand thetypeofcoverforeachoftheotherpoliciesyou held.Signyourscheduleandattachittopage3of yourtaxreturn.PrintXintheYESboxatTaxpayers declarationquestion2aonpage12ofyourtaxreturn. TAX TIP Tocheckifyourhealthinsurerisaregistered privatehealthinsurer,visitthePrivateHealth InsuranceAdministrationCouncilwebsiteat www.phiac.gov.au
COMPLETINg YOUR TAX RETURN Usetheinformationshownonyourstatementsto completeyourtaxreturn.

Ifyouhadmorethanthreepolicies,gotostep4. Step 1 Printtheidentificationcodeofeachofyourhealth insurersatB Health insurer IDonpage6ofyour taxreturn. Step 2 Writeeachofyourprivatehealthinsurance membershipnumbersatC Membership number. Step 3 IntheType of coverbox,printthecodeletter fromeachofyourstatements.Ifyoudonthave astatement,printthecodeletterfromthetable inthenextcolumnthatbestdescribesthetype ofhealthinsurancecoveryouhad.
82
TAXPACK 2010
Medicare levy reduction or exemption
Medicare levy M1
Thisquestionisaboutwhetheryouqualifyfora Medicarelevyreductionorexemption.Australian residentsaresubjecttoaMedicarelevyof1.5% oftheirtaxableincomeunlesstheyqualifyfor areductionorexemption. IfyouarenotanAustralianresident,youare exemptfromtheMedicarelevy.
AMedicarelevyreductionisbasedonyourtaxable income.AMedicarelevyexemptionisbasedon specificcategories.Youneedtoconsideryour eligibilityforareductionoranexemptionseparately. ThefirstpartofthisquestiondealswithMedicare levyreduction.Ifyouarenoteligibleforareduction, youwillbedirectedtoreadtheexemptionsection toseeifyouqualifyforaMedicarelevyexemption.
PartAMedicarelevyreduction
ANSWERINg THIS QUESTION YoureligibilityforareductionofyourMedicarelevyis basedonyourandyourspousestaxableincomeand yourcircumstances.
Forthedefinitionofspouse,seepage123. TAbLE 1 Medicare levy thresholds for an individual Category Ifyouwereeligible forthesenior Australianstaxoffset (seequestionT2) Ifyouwereeligible forthepensionertax offset(seequestionT3) Allothertaxpayers Lower threshold $29,867 Upper threshold $35,137
WHERE DO YOU FIT? Your circumstance Yourtaxableincome isequaltoorlessthan yourlowerthreshold amount. Yourtaxableincomeis greaterthanyourlower thresholdamountand lessthanorequaltoyour upperthresholdamount. Yourtaxableincome isoveryourupper thresholdamount,and youaresinglewithno dependants. Yourtaxableincomeis overyourupperthreshold amountbutyou: nhadaspouse (marriedordefacto) nhadaspousethat diedduringtheyear, andyoudidnothave anotherspousebefore theendoftheyear nareentitledtoa child-housekeeper orhousekeepertax offsetatitemT1,or nwereasoleparent atanytimeduring 200910andyou hadsole care(see definitiononnext page)ofoneormore dependentchildren. What to do Youdonothavetopay theMedicarelevy.Donot writeanythingatitem M1onyourtaxreturn. GotoquestionM2. Youpayonlypartofthe Medicarelevy.Wewill workitout.GotopartB toseeifyouqualifyfor anexemption. Youdonotqualifyfor areduction. Youmaystillqualify foranexemption. GotopartB. Youmaybeeligiblefora Medicarelevyreduction basedonfamilytaxable income. nFirstworkoutyour Family taxable incomeusing worksheet 1on thenextpage. nThenuseworksheet 2 onpage85towork outyourfamily taxable income limit.
$27,697*
$32,584*
$18,488*
$21,750*
*AtthetimeofprintingTaxPack 2010thisamounthadnot becomelaw.
Evenifyoumeetalltheeligiblityconditionsforthe seniorAustralianstaxoffsetyoumaynotgetitasthe amountofthetaxoffsetisbasedonyourindividual taxableincome,notyourcombinedtaxableincomeif youhadaspouse.Ifyoudonotgetit,youwillnotget aMedicarelevyreduction. Forthisquestion,yourtaxableincomeexcludes thetaxedelementofcertainsuperannuationlump sumsyoureceivedduring200910whileyouwere between55and59yearsold(seeReduced taxable income to take account of certain superannuation lump sumsonpage88).
TAXPACK 2010
83
M1 Medicarelevyreductionorexemption
Definition of sole care Solecaremeansthatyoualonehadfull responsibility,onaday-to-daybasis,forthe upbringing,welfareandmaintenanceofachildor student.Youarenotconsideredtohavesolecare ifyouarelivingwithaspouse(marriedordefacto) unlessspecialcircumstancesexist.Generally,for specialcircumstancestoexist,youmustbefinancially responsibleforthedependentchildorstudentand havesolecarewithoutthesupportthataspouse normallyprovides.
Situationswherespecialcircumstancesmay ariseinclude: nYouweremarriedatanytimeduring200910 butduringtheyearyouseparatedfrom,orwere desertedby,yourspouseandforthatperiodyou werenotinadefactorelationship. nYourspousewasinprisonforasentenceofat least12months. nYourspouseismedicallycertifiedasbeing permanentlymentallyincapableoftakingpart incaringforthechildorstudent. Ifyouarenotsurewhetherspecialcircumstances apply,phonetheIndividualInfoline(seetheinside backcover).
Ifyouweresingleorseparatedon30June2010, countonlythenumberofdependentchildrenforwhom youreceivedthefamilytaxbenefit(FTB)duringallor partof2009 10.Countthemevenifyoureceivedonly therentalassistancecomponentofFTBPartAand yousharedthecareofthedependentchild. Writethenumberofdependentchildrenyouhad during2009 10at(g)inworksheet 2onthe nextpage.
Family taxable income Familytaxableincomeisthecombinedtaxable incomesofyouandyourspouse(includingaspouse whodiedduringtheyear),oryourtaxableincomeif youwereasoleparent.

WORKSHEET 1 Family taxable income Yourtaxableincomefrom TAXABLE INCOME OR LOSS onpage3ofyourtaxreturn Yourspousestaxableincome fromTAXABLE INCOME OR LOSSonpage3oftheirtax return(ifapplicable) Add(a)and(b). Anyrelevantamounts ofsuperannuation lumpsumsthatyouoryour spousereceived(seethe fourthparagraphunder Answering this question onthepreviouspage) Take(d)awayfrom(c). Thisisyour family taxable income.
(a)
Working out your number of dependent children Adependentchildisanychildwhowasan Australianresidentwhomyoumaintainedin2009 10, andwas: nagedlessthan21years,or naged21yearsoroverbutlessthan25yearswho isreceivingfulltimeeducationataschool,college oruniversityandwhoseadjustedtaxableincome (seepages557)waslessthan$282plus ($28.92numberofweeksyoumaintainedthem).
Ifyouhadaspouseon30June2010oryourspouse diedduring2009 10andyoudidnothaveanother spousebeforetheendoftheyear,countallyour dependentchildren.
$ $
(b) (c)
(d)
(e)
84
TAXPACK 2010
Medicarelevyreductionorexemption M1
Working out your family taxable income limit YourMedicarelevyisreducedifyourfamilytaxable incomeisequaltoorlessthanthefollowinglimits.

WORKSHEET 2 Family taxable income limit Basicfamilytaxableincome limit(printXintheapplicable boxbelow) Ifyouwereeligibleforthe SeniorAustralianstaxoffset Allothertaxpayers Numberofdependent children(ifapplicable) Multiply(g)by$3,370.* Family taxable income limit Addtheappropriateamount from(f)totheamountat(h). $ $51,176 $36,701*(f) (g) (h)
Weworkoutthereductionforyou,basedonyour spousedetailsandnumberofdependentchildren. ReadontoseeifaMedicarelevyexemptionapplies toyouforallorpartof2009 10.
PartBMedicarelevyexemption
ANSWERINg THIS QUESTION Youmayqualifyforanexemptionfrompayingthe Medicarelevyifyouwereinanyofthefollowing threeexemptioncategoriesatanytimein2009 10. Thesecategoriesare: nmedical nforeignresidentsandresidentsofNorfolkIsland nnotentitledtoMedicarebenefits.
Ifyoudonotfitintooneoftheexemptioncategories, leaveVandWitemM1blankandgotoquestionM2. FortheMedicarelevyexemption(butnotthe reduction),dependant meansanAustralianresident youmaintainedwhowas: nyourspouse nyourchildunder21yearsold,or nyourchild,21to24yearsold,whowasreceiving full-timeeducationataschool,collegeoruniversity andwhoseATIfortheperiodyoumaintainedthe childwaslessthanthetotalof$282plus$28.92for eachweekyoumaintainedthem. SeeWhat is maintaining a dependant? and What is adjusted taxable income? onpages557. Iftheparentsofachildlivedseparatelyorapart forallorpartoftheincomeyearandthechildwas adependantofeachofthem,thechildistreatedas anequaldependantofeachparent(irrespectiveofthe numberofdaysthechildwasineachparentscare). However,whereaparentreceivesFBTPartAforthe child,includingreceivingonlytherentalassistance component,thechildisadependantofthatparent forthenumberofdaysthechildwasintheircare.
(i)
*AtthetimeofprintingTaxPack 2010thisamounthadnot becomelaw.
Is your family taxable income at (e) in worksheet 1 equal to or less than your family taxable income limit at (i) in worksheet 2?
YES
Youareentitledtoareduction. Gotostep1below. Youdonotqualifyforareduction.Goto partBinthenextcolumntoseeifyou qualifyforanexemption.
NO
COMPLETINg YOUR TAX RETURN MEDICARE LEVY REDUCTION Step 1 Ifyouhadaspouseon30June2010,oryourspouse diedduringtheyearandyoudidnothaveanother spousebeforetheendoftheyear,writeyourspouses taxableincomeatO Spouses 200910 taxable income,inSPOUSE DETAILSonpage9ofyourtax return.Ifyourspousehadnotaxableincome,write0.
Step 2 Writethenumberofyourdependentchildren[from(g) inworksheet 2]atYitemM1onpage6ofyourtax return.Ifyouhadnone,write0.
TAXPACK 2010
Category 1: Medical Youareinthisexemptioncategoryandcanclaim afullorhalfexemptionif: noneofthefollowingappliedduringallorpartof 2009 10: youwereablind pensioner youreceivedsickness allowance fromCentrelink
85
youwereentitledtofullfreemedicaltreatmentfor allconditions underdefence forcearrangements orVeterans AffairsRepatriationHealthCard (GoldCard)orrepatriationarrangements, and nduringtheperiodyoumetthatcondition,youalso metoneofthefollowingconditions: Condition Youhadno dependants. Eachofyourdependants (includingyourspouseifyouhad one)either: nwasinoneoftheexemption categories,or nhadtopaytheMedicarelevy. Youhaddependentchildrenwho werenotinanexemption categorybutwhowerealso dependantsofyourspouse,and yourspouseeither: nhadtopaytheMedicarelevy,or nmetatleastoneofthe category 1medicalconditions andyouhavecompleteda family agreement(seethe nextcolumn)statingthatyour spousewillpaythehalflevyfor yourjointdependants. Youhadatleastonedependant (forexample,aspouse)who: nwasnotinanexemption category,and ndidnothavetopaythe Medicarelevy(forexample, becausetheirtaxableincome wasbelowthelowerMedicare levythreshold(seetable 1). Exemption that applies Full Full
Condition Youweresingleorseparated andyou: nhadadependentchildwho wasnotinaMedicarelevy exemptioncategory,and nwereentitledtoFTBPartAor therentalassistance componentofFTBPartAfor thatchild,and nwereinashared-care arrangement. Thenexemptionfromthe Medicarelevyisonthe followingbasis: nForthedaysthatyouhave careofyourdependentchild nForthedaysthatyou do not have careofyour dependentchild Youhadaspousewhomet atleastoneofthecategory 1 medicalconditionsandyou hadachildwho: nwasnotinanexemption category,and nwasdependentonbothofyou. Inthiscase,eitheryouor yourspousecanclaimafull exemption andtheothercan claimahalfexemptionby completingafamily agreement (seebelow).
Exemption that applies
Half Full
Full
FullorHalf
Half
If you were in this exemption category, go to step 1 on the next page.
Family agreements Youcompleteafamily agreementonlyifbothyou andyourspousewouldhavetopaytheMedicarelevy wereitnotforyourexemptioncategorystatus.You donotneedtosendthisagreementtous.Keepit withyourrecords.
86
TAXPACK 2010
Medicarelevyreductionorexemption M1
FAMILY AgREEMENT We agree that the Medicare levy exemption in respect of our dependants for the 200910 year will be claimed as follows. Nameofpersonclaimingthefullexemption Nameofpersonclaimingthehalfexemption Your signature Your spouses signature
AletterfromMedicareisnotsufficient.Formore informationonhowtoapplyforanexemption certificateasatemporaryresident,contactMedicare Australiaon1300 300 271 orvisittheirwebsiteat www.medicareaustralia.gov.au Youalsoqualifyforafullexemptionunderthis categoryif: nyouwereamemberofadiplomatic missionor consularpostinAustralia(oramemberofsuch apersonsfamilyandyouwerelivingwiththem) nyouwerenotanAustraliancitizen nyoudonotordinarilyliveinAustralia,andeither: youdidnothaveanydependantsforthatperiod, or allyourdependantswereinanexemption categoryforthatperiod. If you were in this exemption category,go to step 1 below.
Category 2: Foreign residents and residents of Norfolk Island IfyouwereaforeignresidentoraresidentofNorfolk Islandforthefullyear,youcanclaimafullexemption fortheyear(365days).
IfyouwereaforeignresidentoraresidentofNorfolk Islandforonlypartoftheyear,youcanclaimafull exemptionforthatperiodif: nyoudidnothaveanydependantsforthatperiod,or nallyourdependantswereinanexemptioncategory forthatperiod. If you were in this exemption category, go to step 1 in the next column.
If you were not in any of the above exemption categories LeaveVandWitemM1blank.Youhavefinished thisquestion.GotoquestionM2. COMPLETINg YOUR TAX RETURN MEDICARE LEVY EXEMPTION Step 1 Usetheinformationinthecategoriesabovetowork outwhetheryouqualifyforafullexemptionorahalf exemptionandtodeterminehowmanydependent childrenyouhadduringtheyear.
Step 2 Workoutthenumberofdaysforwhichyoucan claimafull exemptionandthenumberofdaysfor whichyoucanclaimahalf exemption. Themaximumtotalnumberofdaysyoucanclaim is365.Ifyouhaveoverlappingqualifyingperiods, countthedaysinthoseoverlappingperiodsonly once.Ifafullexemptionperiodoverlapsapart exemptionperiod,counttheoverlappingdays asafullexemptionperiod.
Category 3: Not entitled to Medicare benefits Youcanclaimafull exemptionforanyperiodfor whichyouhaveacertificate fromtheMedicareLevy ExemptionCertificationUnitofMedicareAustralia showingyouwerenotentitledtoMedicarebenefits becauseyouwereatemporaryresidentforMedicare purposesandeither: nyoudidnothaveanydependantsforthatperiodor nallyourdependantswereinanexemptioncategory forthatperiod.
TAXPACK 2010
87
Step 3 Write thenumberofdaysyouwerecoveredforafull exemptionatVitemM1. Writethenumberofdaysyouwerecoveredforahalf exemptionatWitemM1. IfyouwereatemporaryresidentforMedicare purposesandhaveacertificatefromtheMedicare LevyExemptionCertificationUnitofMedicare Australia(seecategory3)printCintheCLAIM TYPE box.Ifyoudonotfallwithinthiscategoryleavethe CLAIM TYPEboxblank. Wewillworkoutyourexemptionentitlement. Step 4 Ifyouhadaspouseatanytimein200910,youmust completeSpouse details married or de facto on pages911ofyourtaxreturn. TAX TIPS Ifyouwouldliketoworkouttheamount ofMedicarelevyyouhavetopay,goto www.ato.gov.au/calculatorsandusethe Medicarelevycalculator(underMedical).
Reduced taxable income to take account of certain superannuation lump sums ForMedicarelevypurposes,yourtaxableincome excludesthetaxedelementofasuperannuationlump sum,otherthanadeathbenefit,thatyoureceived whenyouwere55to59yearsoldthatdoesnot exceedyourlow-ratecapfor200910.For200910, thelow-ratecapis$150,000,butitcouldbelessif youreceivedsuperannuationlumpsumsinprevious years(seetable 1onpage118andthedefinitionof low-ratecaponpage125formoreinformation). Example Billreceivedsuperannuationlumpsumsof$100,000 in200809and$80,000in200910bothofwhich consistedentirelyofataxedelement.Hewas between55to59yearsoldwhenhereceived bothpayments.
Hislow-ratecapisnowonly$50,000,thatis $150,000lessthe$100,000hereceivedin200809. Billsubtractsthe$50,000ofhislow-ratecapfrom his200910taxableincome. Bills200910taxableincomeforMedicarelevy purposesincludes$30,000,beingtheamount bywhichthesuperannuationlumpsumhe receivedexceededhislow-ratecap(thatis, $80,000less$50,000).
88
TAXPACK 2010
Medicare levy surcharge

THIS QUESTION IS COMPULSORY.
Medicare levy M2
TheMedicarelevysurcharge(MLS)isinadditionto theMedicarelevy.TheMLSrateis1%of: n yourtaxableincome n yourtotalreportablefringebenefits,and n anyamountonwhichfamilytrustdistributiontax hasbeenpaid. YoumayhavetopaytheMLSifyouoryour dependants(includingyourspouse,evenifthey hadtheirownincome)didnothaveanappropriate level of private patient hospital cover forthewhole of200910andyourincome for MLS purposes wasaboveacertainamount.
n theamountonwhichfamilytrustdistributiontax
hasbeenpaid.
Ifyouwere55to59yearsoldthisamountisthen reducedbythetaxedelementamountof superannuationlumpsums,otherthanadeath benefit,receivedduring200910thatdonotexceed yourlowratecap(seeSuperannuationlumpsums andincomeforMLSpurposesonpage94).
Appropriate level of private patient hospital cover Anappropriatelevelofprivatepatienthospital coveriscoverprovidedbyaregisteredhealthinsurerfor hospitaltreatmentinAustraliawhichhasanexcessof: n $500orless(forapolicycoveringonlyoneperson), or n $1,000orless(forallotherpolicies).
Excessistheamountyou paybeforeyourhealth insurerpaysforanyclaimyoumake. Generalcover(formerlycalledancillarycover) orextrasisnotprivatepatienthospitalcover becauseitcoversonlyitemssuchasoptical, dental,physiotherapyorchiropractictreatment. Ifyouhavehealthcoverbutarenotsurewhether itisattheappropriatelevel,yourregisteredhealth insurercantellyou. Ifyouhaveoverseasvisitorshealthcover,check withyourprovidertomakesurethatyourpolicyis onewhichhasanappropriatelevelofprivatepatient hospitalcoverforMLSpurposes.
Dependants Forthisquestion,adependant(regardlessoftheir income,includes: nyourspouse,eveniftheyworkedduring200910 orhadtheirownincome nyourchildrenunder21yearsold n yourchildrenwhoare21yearsoldorolderand under25yearsoldwhoarefull-timestudents.

DependentsmusthavebeenAustralianresidents andyoumusthavecontributedtotheirmaintenance. Toreadaboutwhatisconsideredmaintaininga dependant,seepage54. Yourspouseincludesanotherperson(whetherof thesamesexoroppositesex)who: n youwereinarelationshipwiththatwasregistered underaprescribedstateorterritorylaw n althoughnotlegallymarriedtoyou,livedwithyou onagenuinedomesticbasisinarelationshipas acouple. Thedefinitionofchildincludeschildrenofpeople whoareinsame-sexrelationships.Seethedefinition ofchildonpage123. Ifyouhadprivatepatienthospitalcoverduring 200910,youwillneedastatementfromyourhealth insurershowingthenumberofdaysyouandyour dependantswerecoveredbyanappropriatelevel ofhealthcover.Ifyoudonothavethisstatement, contactyourhealthinsurer.
Income for MLS purposes YourincomeforMLSpurposesisyourtaxable incomeplusthefollowingiftheyapplytoyou: n reportablefringebenefits(shownonyourpayment summary) n reportablesuperannuationcontributions(which isthesumofbothyourreportableemployer superannuationcontributionsandyourdeductible personalsuperannuationcontributions) n yournetinvestmentloss(whichistheamount bywhichyourfinancialinvestmentdeductions exceededyourfinancialinvestmentincome, plustheamountbywhichyourrentalproperty deductionsexceededyourrentalpropertyincome)
Were you and all your dependants, including your spouse, covered by an appropriate level of private patient hospital cover for the whole of 200910?
YES NO
Gotostep 5onpage93. Readbelow.
TAXPACK 2010
89
M2 Medicarelevysurcharge
ANSWERINg THIS QUESTION Ifyoudonothaveanappropriatelevelofprivate patienthospitalcover,youmaybeliableforMLS. WhetherornotyouareliabletopayMLSdependson: nyourincomeforMLSpurposesand nyourcombined income forMLS purposes,ifyou hadaspouseforthewholeof200910orifyour spousediedin200910.
Completeworksheet 1toworkoutyourandyour spousesincome(ifrelevant)forMLSpurposes Ifyouhadexemptforeignemploymentincome,andyour taxableincomeis$1ormore,addyourexemptforeign incometoyourtaxableincome,andwritethetotalat(a) inworksheet 1.Thesameappliesforyourspouse. Ifyouwere55to59yearsold,writeat(k)thetaxed elementamountofsuperannuationlumpsums,other thanadeathbenefit,youreceivedduring200910 thatdonotexceedyourlowratecap.Thesame appliesforyourspouse.(SeeSuperannuation lump sums and income for MLS purposesonpage94.) WORKSHEET 1 Working out income for MLS purposes
Ifyoudidnothaveaspouse,gotoMedicare levy surcharge exemptiononthenextpageafteryou havecompletedworksheet 1. Ifyourspousewasunderalegaldisability,writeat(h) inthespousecolumnyourspousesnetincomefrom atrustforwhichthetrusteewasliabletopaytax. Examplesofalegaldisabilityinclude:beinga bankrupt,beingdeclaredlegallyincapablebecause ofamentalconditionorbeingunder18yearsoldon 30June2010.Donotincludeanyamountthathas alreadybeenincludedinyourspousestaxable incomeat(a). Writeat(c)thetotalamountofdistributionstoyouor yourspouse: nonwhichfamilytrustdistributiontaxhasbeenpaid, and nwhichyouoryourspousewouldhavehadtoshow asassessableincomeifthetaxhadnotbeenpaid.
You Taxableincome(fromTAXABLE INCOME OR LOSS onpage4ofthetaxreturn) Totalreportablefringebenefitsamount(fromWitemIT1 onpage8ofthetaxreturn) Amountonwhichfamilytrustdistributiontaxhasbeenpaid (fromXitemA4onpage16ofthesupplementarysectionof youroryourspousestaxreturn) Netfinancialinvestmentloss(fromXitemIT5onpage8 ofthetaxreturn) Netrentalpropertyloss(fromYitemIT6onpage8ofthetaxreturn) Reportableemployersuperannuationcontributions (fromTitemIT2onpage8ofthetaxreturn) Deductiblepersonalsuperannuationcontributions(fromHitem D13onpage15ofthesupplementarysectionofthetaxreturn) Yourspousesshareofthenetincomeofatrust onwhichthetrusteemustpaytax(fromTSpouse detailson page10ofthereturn)
90
Spouse (a) (b) $ $ (a) (b)
$ $
$ $ $ $ $
(c) (d) (e) (f) (g)
$ $ $ $ $
(c) (d) (e) (f) (g)
(h)
TAXPACK 2010
Medicarelevysurcharge M2
Addtheamountsfrom(a)to(h)ineachcolumn. Ifyouoryourspousewere55to59yearsold,writeherethetaxed elementamountofsuperannuationlumpsums,otherthanadeath benefit,receivedduring200910thatdonotexceedyouroryour spouseslowratecap(seeSuperannuation lump sums and income for MLS purposesonpage94). Take(k)awayfrom(j). ThisiseachindividualsincomeforMLSpurposes. Addtheamountfrom(l)inyourcolumntotheamount from(l)inyourspousescolumn.
(j)
(j)
(k) (l)
(k) (l) (n)
$ $
YourincomeforMLSpurposeswhenyouaresingleistheamountat(l)inyourcolumn. YourcombinedincomeforMLSpurposes,istheamountat(n).
Medicare levy surcharge exemption Ifyoufitinoneofthefollowingcategories,youare exemptfromMLSforthewholeof200910.

TAbLE 1 Exemption categories YourincomeforMLSpurposeswas$73,000 or less,andforthewholeof200910,youwere singlewithoutadependentchild. YourincomeforMLSpurposeswas$146,000 or less,and: nforpartof200910youweresingle nyourspousedidnotdieduringtheyear,and nforthewholeoftheyearyoudidnothavea dependentchild. Youweresinglewithadependentchildand yourincomeforMLSpurposeswas$146,000 or less(plus$1,500foreachdependentchildafter thefirst). Youhadaspouse(withorwithoutdependent children),andyourcombinedincomeforMLS purposeswas$146,000 or less(plus$1,500 foreachdependentchildafterthefirst). Inworkingoutwhetheryourincomeexceedsan MLSincomethreshold,ifyourspousediedin 200910andyoudidnothaveanotherspouse beforetheendoftheyear,youaretreatedas havinghadaspouseforthewholeof200910.
TAXPACK 2010
Youandallyourdependants(including yourspouse,ifany)wereinaMedicarelevy exemptioncategoryforthewholeof200910 (seequestionM1). Thecombinedincomeofyouandyourspousefor MLSpurposeswasabovethelimit,butyourown incomeforMLSpurposeswas$18,488 or less. Your spouse shows a foreign lump sum payment on the supplementary section of their tax return. IfyouareliableforMLSonlybecauseyour spousehasshownalumpsumpaymentinarrears atitem20 Foreign source income and foreign assets or propertyoritem24 Other incomeon thesupplementarysectionoftheirtaxreturn,youmay beentitledtoataxoffsetuptotheamountofMLS youhavetopay.Wewillcalculatethetaxoffsetforyou. Youwillneedtoprovideadditionalinformation. PrintSCHEDULEOFADDITIONALINFORMATION ITEMM2onthetopofaseparatepieceofpaper. Printyourname,address,taxfilenumberandthe nameandaddressofyourspouse.Explainthatyour spousereceivedalumpsumpaymentinarrears. Signyourscheduleandattachittopage3ofyour taxreturn.PrintX intheYES boxatTaxpayers declarationquestion2aonpage12ofyourtaxreturn.
What if your circumstances changed during the year? Ifyouhadanewspouseoryouseparatedfrom yourspouse,oryoubecameorceasedtobeasole

91
parent,boththesingleandthefamilysurcharge thresholdsmayapplytoyoufordifferentperiods. Youneedtoworkoutwhetheryouwereliablefor MLSforanyperiodduring200910thatyou: nweresingle(thatis,youhadnospouseor dependentchildren)applythesinglesurcharge thresholdof$73,000toyourincomeforMLS purposes nhadaspouseoranydependentchildrenapply thefamilysurchargethresholdof$146,000,plus $1,500foreachdependentchildafterthefirst,to yourincomeforMLSpurposes. Ifyourspousediedduring200910,youaretreated asifyouhadaspouseforthewholeyearandyou applythefamilysurchargethresholdof$146,000, plus$1,500foreachdependentchildafterthefirst. Ifyourincomewasabovetherelevantsurcharge thresholdthatappliestoyou,andyouandyour dependents(includingyourspouse,ifany)didnot haveprivatepatienthospitalcover,orwerenotina Medicareexemptioncategoryforthewholeyear,then youmaybeliableforMLS. TohelpyouworkoutwhetheryouwereliableforMLS forthedifferentperiods,seetheexamplebelow.
MichaelandMichelleweresinglefortheperiod 13October2009to30June2010,sothesingle personMLSthresholdof$73,000appliesfor thatperiod: n MichelleisliabletopayMLSforthisperiod becauseher$90,000incomeforMLSpurposes exceeded$73,000 n Michaelisnot liableforMLSforthisperiod becausehis$69,000incomeforMLSpurposes waslessthan$73,000. MichelleandMichaelcompletetheirtaxreturnsat AitemM2bywritingthenumberofdays that they were not liable for MLSin200910: nMichellewrites104thenumberofdaysinthe firstperiodwhenshewasnotliableforMLS nMichaelwrites365becausehewasnotliablefor MLSin200910.
Single person covered for part of the year Ifyouweresingleandtookoutprivatepatienthospital coverduringtheyearusethefollowingexampleto helpyouworkouthowmanydaysyouareliableto payMLS. Example 2: Part-year private patient hospital cover In200910Jacintawasnotmarriedandhadno dependants.ShehadincomeforMLSpurposesof $76,000.ShewasnotinaMedicarelevyexemption categoryatanytimeduringtheyear.
Jacintatookoutprivatepatienthospitalcoveron 15January2010.BecauseJacintasincomeforMLS purposeswasabovethesinglepersonsurcharge thresholdof$73,000andshedidnothaveprivate patienthospitalcoverforthefullyearshewillhaveto payMLSforthepartoftheyearthatshedidnothave privatepatienthospitalcover. JacintawillnothavetopayMLSforthetimeshehad privatepatienthospitalcover,thatis,15January2010 to30June2010(167days). Jacintawillwritethenumberofdaysin200910that sheisnotliableforMLS(167)atAitemM2 onher taxreturnandcompletePrivate health insurance policy detailsonpage6ofhertaxreturn.
Example 1: Spouse for part of the year MichaelandMichellelivedtogetherasacoupleona genuinedomesticbasisforsevenyears,buton12 October2009theyseparatedandeachstayedsingle. Theydidnothaveprivatepatienthospitalcoveratany timeduring200910.
MichelleandMichaelhadnodependentchildren, buttheyweredependantsofeachotherforMLS purposesuntiltheyseparated. MichaelsincomeforMLSpurposeswas$69,000and Michelleswas$90,000.Inpreviousyearstheyhad usedtheircombinedincometoassesstheirMLS liability.Theynowhavetousetheirindividualincome forMLSpurposes. MichaelandMichelleareconsideredtobeafamilyfor theperiod1Julyto12October2009(104days),so thefamilyMLSthresholdof$146,000appliestoeach of themforthatperiod.Thismeans: nMichelleisnotliableforMLSforthisperiodbecause her$90,000incomeforMLSpurposeswasless than$146,000 nMichaelisnotliableforMLSforthisperiodbecause his$69,000incomeforMLSpurposeswasless than$146,000.
92
Family covered for part of the year Ifsomemembersofyourfamilywerecoveredby privatepatienthospitalcoverforthewholeyearand othermembersofyourfamilyhadcoverforonlypart

TAXPACK 2010
Medicarelevysurcharge M2
oftheyear,usethefollowingexampletohelpyou workouthowmanydaysyouareliabletopayMLS.
Example 3: Part-year liability JillandKevinhavebeenmarriedforanumberof years.Theyhavethreedependentchildren.Jill, KevinandtheirchildrenwerenotinaMedicarelevy exemptioncategoryatanytimeduringtheyear. Jillandthechildrenwerecoveredbyprivatepatient hospitalcoverforthefullincomeyear.Kevinhadhis nameaddedtothepolicyon10January2010.
JillandKevinhadacombinedincomeforMLS purposesof$152,000.Thefamilysurcharge thresholdforJillandKevinis$149,000(thatis, $146,000plustwice$1,500).Becausenoteveryone wascoveredfortheperiod1July2009to9January 2010andtheircombinedincomeforMLSpurposes exceedsthefamilysurchargethreshold,JillandKevin areboth liableforMLSforthisperiod(193days).Jill andKevinwouldbothwritethenumberofdaysthat theywerenotliableforMLS(172)atAitemM2 on theirtaxreturnsandcompletePrivate health insurance policy details onpage6oftheir taxreturns.
IfyouhavetopayMLSfor: nthewholeperiod1July2009to30June2010, write0atAitemM2 npartoftheperiod1July2009to30June2010, writeatAitemM2thenumberofdays for which you do not have to pay MLS. Writethenumberofdependentchildrenyouhad during200910atDitemM2. Step 3 IfyouprintedXintheNObox(becauseyouwerenot coveredbyprivatepatienthospitalcoverforthefull yearandwerenotinanexemptioncategory),read pages1016andwhereapplicable,completeincome testitemsIT1,IT2,IT5andIT6. Step 4 Ifyouhadaspouseduring200910andyouorany ofyourdependants(includingyourspouse)werenot coveredbyprivatepatienthospitalcoverforthefull year,completeSpouse details married or de facto onpages911ofyourtaxreturn. IfyourspousesincomeforMLSpurposesincluded asuperannuationlumpsumthatwasshownat(k)in worksheet 1,writethatamountatFunderSpouse details married or de facto. Step 5 Ifyouhadprivatepatienthospitalcoverforany partoftheyear,youmustcompletePrivate health insurance policy details.Seepage82. Youhavenowfinishedthisquestion.Goto questionA1. Step 6 Ifyouandallyourdependants(includingyourspouse) hadanappropriatelevelofprivatepatienthospital coverforthewholeof200910,printX intheYES boxattherightofEitemM2.Makesureyoualso completeyourPrivate health insurance policy details;seepage82.Youhavenowfinishedthis question.GotoquestionA1. TAX TIPS Ifyouwouldliketoworkouttheamountof Medicarelevysurchargeyouhavetopay,go towww.ato.gov.au/calculatorsandusethe Medicarelevycalculator(underMedical).
COMPLETINg YOUR TAX RETURN Step 1 Ifyouoranyofyourdependants(includingyour spouse)didnothaveprivatepatienthospitalcover oronlyhadcoverforpartoftheyear,printX inthe NO boxattherightofEitemM2.
Step 2 Ifyouwereinanexemptioncategory(seetable 1 onpage91)forthewholeof200910,printXinthe YESboxtotheleftofYoudonothavetopaythe surcharge,andwrite365atAitemM2.Youhave nowfinishedthisquestion.GotoquestionA1. Ifyouwerenotinanexemptioncategory,printXin theNOboxtotheleftofYoumayhavetopaythe surcharge. WriteatAitemM2 thenumberofdays for which you do not have to pay MLS. IfyoudonothavetopayMLSforanydaysduringthe period1July2009to30June2010,write365atA itemM2.
TAXPACK 2010
93
Superannuation lump sums and income for MLS purposes for worksheet 1 (step k) YourincomeandyourcombinedincomeforMLS purposesincomeexcludethetaxedelement ofasuperannuationlumpsum,otherthanadeath benefit,thatyoureceivedwhenyouwere55to59 yearsoldthatdoesnotexceedyourlow-ratecap amountfor200910.For200910thelow-ratecap amountis$150,000,butitcouldbelessforyouif youhadreceivedcertainsuperannuationlumpsums inpreviousyears(seetable 1onpage118andthe definitionoflow-rate caponpage125formore information).
Example Billreceivedasuperannuationlumpsumof $100,000in200809and$80,000in200910, bothofwhichconsistedentirelyofataxedelement. Hewasbetween55and59yearsoldwhenhe receivedbothpayments.BillswifeMaryreceiveda superannuationlumpsumof$50,000thatconsisted entirelyofataxedelementin200910whenshewas 56yearsold.

Billslowratecapfor200910is$50,000becausehis low-ratecapwasreducedby$100,000in200809. Therefore,theamounthereceivedinexcessofhis low-ratecapthatis,$30,000cannotbetakeninto accountatsteps(k)&(l)inworksheet 1.Toworkout hisincomeforMLSpurposesusingworksheet 1,Bill subtracts$50,000fromtheamountworkedoutat step(j)inthatworksheet. ToworkouthiscombinedincomeforMLSpurposes (usingworksheet 1,spousecolumn),Billsubtracts Marys$50,000superannuationlumpsumfromthe amountworkedoutatstep(j)inthespousecolumn.
94
TAXPACK 2010
Under 18
Adjustments A1
Ifyouwereunder18yearsoldon30June2010, youmustcompletethisitemoryoumaybetaxed atahigherratethannecessary.
Were you under 18 years old on 30 June 2010?

NO YES
GotoquestionA2. Readbelow.
ANSWERINg THIS QUESTION Tocompletethisitemonyourtaxreturnyoumust determinewhetheroneofthefollowingcategories appliedtoyouon30 June 2010. nYou: wereworkingfulltimeorhadworkedfulltime forthreemonthsormorein200910(ignoring full-timeworkthatwasfollowedbyfull-timestudy), and intendedtoworkfulltimeformostorallof 201011andnotstudyfulltimein201011. nYouwereentitledtoadisabilitysupportpensionor arehabilitationallowance,orsomeonewasentitled toacarerallowancetocareforyou. nYouwerepermanentlyblind. nYouweredisabledandwerelikelytosufferfromthat disabilitypermanentlyorforanextendedperiod. nYouwereentitledtoadoubleorphanpension,and youreceivedlittleornofinancialsupportfromyour relatives. nYouwereunabletoworkfulltimebecauseof apermanentmentalorphysicaldisability,and youreceivedlittleornofinancialsupportfrom yourrelatives. COMPLETINg YOUR TAX RETURN Step 1 Ifyouwereinanyoftheabovecategorieson 30June2010,allyourincomewillbetaxedat normalrates.Write0atJitemA1.Thenprintthe codeletterAintheTYPEboxattherightofJ.You havenowfinishedthisquestion.GotoquestionA2.
Otherwise,readon.
Step 2 Addupanyofthefollowingincomeamountswhich youhaveshownonyourtaxreturn: nemploymentincome ntaxablepensionsorpaymentsfromCentrelink ortheDepartmentofVeteransAffairs nacompensation,superannuationorpension fundbenefit nincomefromadeceasedpersonsestate nincomefrompropertytransferredtoyouasaresult ofanothersdeathorfamilybreakdown,ortosatisfy aclaimfordamagesforaninjuryyousuffered nincomefromyourownbusiness nincomefromapartnershipinwhichyouwerean activepartner nnetcapitalgainsfromthedisposalofanyofthe propertyorinvestmentsreferredtoabove nincomefrominvestmentofamountsreferred toabove. Step 3 Addupallyourdeductionsthatrelatetothe incomefromstep2(seetheDeductionssectionon pages2749).Takeawaythetotalofthosedeductions fromthetotalincomeyouworkedoutatstep2. Step 4 Writetheamountfromstep3atJitemA1.This amountistaxedatnormalrates.Ifyoudonothave anyoftheincomelistedatstep2ortheamountfrom step3isnil,write0atJitemA1. Step 5 PrintthecodeletterMintheTYPEboxattheright ofJitemA1. TAX TIPS Ifyoureceivedadistributionfromatrust, readquestion13 Partnerships and trustson pagess26inTaxPack 2010 supplement.
TAXPACK 2010
95
A2 Adjustments
Part-year tax-free threshold
IfyouwerenotanAustralianresidentforthewhole 200910year,weusetheinformationyoushowat thisitemonyourtaxreturntoworkoutyourtax-free threshold. IfyouarenotsurewhetheryouareanAustralian resident,readAre you an Australian resident? onpage4.
In 200910 did you: n become an Australian resident, or n stop being an Australian resident?
NO
GotoA3 Super co-contributions onthenextpage. Readbelow.
YES
COMPLETINg YOUR TAX RETURN If you became an Australian resident in 200910 Step 1 WritethedateyoubecameanAustralianresident fortaxpurposesintheDateboxatitemA2. Step 2 Writethenumberofmonthsthatyouwerean Australianresidentin200910(countingthefirst monthduringwhichyoubecamearesident)atN itemA2.Forexample,ifyoubecamearesidentin November2009andremainedaresidentforthe restoftheincomeyear,youwouldwrite8.
If you stopped being an Australian resident in 200910 Step 1 WritethedateyoustoppedbeinganAustralian residentfortaxpurposesintheDateboxatitemA2. Step 2 Writethenumberofmonthsfrom1July2009 towhenyoustoppedbeinganAustraliaresident (countingthemonthinwhichyoustoppedbeing aresident)atNitemA2.Forexample,ifyou stoppedbeingaresidentinSeptember2009, youwouldwrite3.
96
TAXPACK 2010
Super co-contribution
Adjustments A3
Youneedtocompletethisquestionif: nyoumadeaneligiblepersonalsupercontribution (forwhichyouarenotclaimingadeduction)toa complyingsuperfundorretirementsavingsaccount nyouwereunder71yearsoldon30June2010,and nyourtaxableincomefor200910waslessthan$61,920.
Did all these apply to you?

NO
Youarenotentitledtoasuper co-contribution.Gotoquestion Income testsonpage101. Readbelow.
YES
ANSWERINg THIS QUESTION Do any of the following apply to you? n Youshoweddepositsorwithdrawalsfromthefarm managementdepositsschemeatitem17. n Youshowedforeignentityincomeatitem19. n Youshowedbonusesfromlifeinsurancecompanies orfriendlysocietiesatitem22. n Youshowedforestrymanagedinvestmentscheme incomeatitem23ordeductionsatitem D15. n Youshowedotherincomeatitem24.
YES
rentalincomeyoushowedatPitem21onyour taxreturn(supplementarysection). n Youshowedacapitalgainfromtrustdistributions atHitem18onyourtaxreturn(supplementary section). n Youshowedincomefromapartnershipatitem13 onyourtaxreturn(supplementarysection).

NO
GotoG Income from employment or business onpage99. Workthroughsteps1,2and3.
YES
YouneedtousetheSuper co-contributions workbook 2010(NAT73495)toanswer thisquestion.Youcangetacopyfromour websiteorbyphoningourSuperannuation Infoline(seetheinsidebackcover). Readbelow.
Step 1 Useworksheet 1toworkoutwhattowriteat(q)in worksheet 3. WORKSHEET 1 Interest and dividend income
NO
COMPLETINg YOUR TAX RETURN Joint income group Youwereinajointincomegroupifyouowned income-producingassetswithanotherpersonor persons.Forexample: n youwereinonejointincomegroupifyouandyour parentshadajointbankaccount,and n youwereinanotherjointincomegroupifyouand yourspouseco-ownedrentalproperties. F Income from investment, partnership and other sources Do any of the following apply to you? n Youwereinajointincomegroupandyouhave deductionsforthefollowingjointincome interestyoushowedatitem10 dividendsyoushowedatitem11 distributionsfromtrustsyoushowedatLorU item13onyourtaxreturn(supplementarysection) foreignsourceincomeyoushowedatEorFitem 20onyourtaxreturn(supplementarysection)
TAXPACK 2010
AmountfromLitem10on page3ofyourtaxreturn AmountfromSitem11on page3ofyourtaxreturn AmountfromTitem11on page3ofyourtaxreturn AmountfromUitem11on page3ofyourtaxreturn Trust distributions AmountfromLitem13on page13ofyourtaxreturn (supplementarysection) AmountfromUitem13on page13ofyourtaxreturn (supplementarysection)
$ $ $ $
(a) (b) (c) (d)
(e)
(f)
97
A3 Superco-contribution
Foreign source income AmountfromEitem20on page14ofyourtaxreturn (supplementarysection) AmountfromFitem20on page14ofyourtaxreturn (supplementarysection) Rental income Amountfrom Pitem 21on page15ofyourtaxreturn (supplementarysection) Addallamounts above,from(a)to(j). $ (j) $ (g)
Worksheet 2 Foreveryjointincomegroupyouwereinvolvedin: n writeyourshareofincomeincolumn(l) n writeyourshareofdeductionsincolumn(m) n writethelesseramountfromcolumns(l)and(m) incolumn(n).

Ifyoushowedpartnershipdistributionsatitem13, donotincludetheminworksheet 2.
(h)
Example 1 Sallyisintwojointincomegroups,onewithDavid andanotherwithDawn.

SallyandDavidjointlyownaninvestmentproperty andhaveajointbankaccount.Sallysshareof: n rentalincomeis$10,000 n rentaldeductionsis$15,000 n bankinterestis$100 n bankinterestdeductionsis$0asthereareno bankfees. SallyalsojointlyownsasharesportfoliowithDawn. Hershareof: n dividendincomeis$4,000 n deductionsis$0. Sallywrites$10,100at(n)forthejointincomegroup withDavidandshewrites$0at(n)forthejoint incomegroupwithDawn. Sallyaddsthetwoamountsincolumn(n)and transfersthetotalto(r)inworksheet 3.
(k)
Transfertheamountat(k)to(q)inworksheet 3. Step 2 Were you in a joint income group?

NO YES
Gotostep3andwrite0at(r)inworksheet 3. Useworksheet 2andreadexample1to workoutwhattowriteat(r)inworksheet 3.
WORKSHEET 2 Joint income group SallywithDavid SallywithDawn 1. 2. 3. 4. Addthelesseramounts.

98
Income (l) $10,100 $4,000 $ $ $ $
Deductions(m) $15,000 $0 $ $ $ $
Lesser amount(n) $10,100 $0 $ $ $ $ $ (p)
TAXPACK 2010
Superco-contribution A3
Transfertheamountat(p)to(r)inworksheet 3. Step 3 Workthroughworksheet 3toworkoutwhattowrite at FitemA3. WORKSHEET 3 Amountfrom(k)in worksheet 1 Amountfrom(p)in worksheet 2 Take(r)awayfrom(q). Thetotalofalldistributions ofincomefrompartnerships thatyoutookintoaccountin calculatingthetotalamount shownatNorOitem13on page13ofyourtaxreturn (supplementarysection). Donotincludeyourshare ofapartnershiploss. Thatpartofatrustdistribution thatyouexcludefromLorU item13becauseitisacapital gain(supplementarysection). Add(s),(t)and(u). $ $ $ (q) (r) (s)
Inansweringthisquestion,incomefromemployment includesincomeyouearnasacompanydirectoror underacontractwhollyorprincipallyforyourlabour. Formoreinformationaboutemploymentincomerefer toA3 Co-contributions information workbook (NAT73495).Youcanobtainacopyfromourwebsite orbyphoningourSuperannuationInfoline(seethe insidebackcover). Do you show any 200910 employment income or business income on your tax return other than at any of the following items? n 1,2,3,4(otherthandeathbenefits),Batitem12, IT1orIT2ofyourtaxreturn n P1orP8onyourBusiness and professional items schedule for individuals 2010
YES NO
Gotostep4. Readbelow.
Did you receive a share of income from a partnership carrying on a business in which you were a partner? Ignore partnership losses and distributions from trusts that carry on a business. (t)
YES NO
Gotostep4. Readbelow.
(u)
(v)
Transfertheamountat(v)toFitemA3onpage7 ofyourtaxreturn.If(v)is0,printCintheCODE boxatF.
Did you have income that is not from your employment in 200910 or from a business you carried on, which you show at any of the following items? n 1,2,3,4(otherthandeathbenefits),Batitem12, IT1orIT2ofyourtaxreturn n P1orP8onyourBusiness and professional items schedule for individuals 2010
NO
GotoH Deductions from business income. Gotostep4.
g Income from employment or business Oursystemsautomaticallytreatsomeamounts asemploymentincomeyouearnedin200910or businessincome.Ifthetotaloftheseamountsis notthesameasyouractual200910employment incomeorbusinessincome(forexample,because youshowanemployerlumpsumpaymentyou receivedforemploymentthatfinishedin200809), youneedtomakeanadjustmentbywritingan amountatG.
YES
Step 4 Workthroughworksheet 4onthenextpagetowork outwhattowriteatGitemA3.
TAXPACK 2010
99
A3 Superco-contribution
WORKSHEET 4 Totalemploymentincome from200910orbusiness incomethatyoudonotshow: n atitems1,2,3,4(other thandeathbenefits),Bat item12,IT1orIT2,or n asincomeonyourBusiness and professional items schedule for individuals 2010. Thisincludesyourshareof distributionsofbusiness incomefromallpartnerships inwhichyouareapartner.Do notincludepartnershiplosses anddistributionsfromtrusts thatcarryonabusiness. Totalincomethatwasnot fromemploymentin200910 orfrombusiness,which youshow: n atitems1,2,3,4(other thandeathbenefits),Bat item12,IT1orIT2,or n asincomeonyourBusiness and professional items schedule for individuals 2010. Thisincludesincomefrom employmentthatceased before1July2009. Take(x)awayfrom(w). $ $ (x) (y)
H Deductions from business income Doyouhavebusinessdeductionsotherthanthose youincludedinthedeductionitemsatitemP8on theBusiness and professional items schedule for individuals 2010?
NO
Write0at HitemA3onpage7ofyourtax returnandgotoquestionIT1. Readbelow.
YES
(w)
Examplesofdeductionsthatyoumayinclude atHare: n thebusinessportionofadistributedpartnership lossincludedincalculatingtheamountatNorO atitem13(aslongasthepartnershipcarrieson abusiness) n deductionsatXorYatitem13whichrelateto thebusinessincomeportionofapartnership distribution n personalserviceincomedeductionsatitemP1 ontheBusiness and professional item schedule for individuals 2010whichrelatetocarryingonyour business n deductionsyoushowatD10forcostsinvolvedin managingyourbusinesstaxaffairsasasoletrader orpartnershipbusiness. Step 5 WritethetotalamountofthesedeductionsatH itemA3onpage7ofyourtaxreturn.
Transfertheamountat(y)toGitemA3onpage7of yourtaxreturn.Iftheamountat(y)isnegative,printL intheCODEboxatG.
100
TAXPACK 2010
Income tests
Income tests IT1IT7
CompleteitemsIT1toIT7ifanyofthefollowing applytoyou. nYouhaveapaymentsummaryshowingatotal reportablefringebenefitsamountorreportable employersuperannuationcontributions. nYoureceivedfamilypayments,childcarebenefits, oratax-freepensionfromCentrelinkorthe DepartmentofVeteransAffairs. nYourchildreceivedstudentpaymentsfrom Centrelinkbasedonparentalincome. nYouholdaCommonwealthseniorshealthcard. nYoupaidchildsupport. nYouhaveaHigherEducationLoanProgram (HELP)orStudentFinancialSupplementScheme (SFSS)debt. nYoucompletedanyofthefollowingitemsonyour: Tax return for individuals 2010 12 Employee share schemeswhereyouwrote anamountatD T1 Spouse (without dependent child or student), child-housekeeper or housekeeper taxoffset T2 Senior Australianstaxoffset T3 Pensionertaxoffset M2 Medicare levy surcharge whereyouprinted XintheNoboxatE
Tax return for individuals (supplementary section) 2010 T7 Superannuation contributions on behalf of your spousetaxoffset T10 Parent, spouses parent or invalid relative taxoffset T12 Net income from working supplementary section T13 Entrepreneurs tax offsetiftheproposed amendmentsatitemT13havebecomelaw oryouchoosetocompletetherelevantitems anyway Business and professional items schedule for individuals 2010 P9 Business loss activity details. Weneedtheinformationrequestedinthissection toaccuratelyassessyourtaxliability,including anyMedicarelevysurchargeandHELPorSFSS repaymentliabilityyoumayhave.Wemayalso passthisinformationtoothergovernmentagencies suchasCentrelinkwhichwillusetheinformation toensureyouarereceivingyourfullentitlementto governmentbenefits.
Spouse details Ifyouhaveaspouse,youmustprovidesimilar informationaboutthematSpouse details married or de facto. More information Formoreinformationontheincometests,goto www.ato.gov.au/incometests
IT1 TOTALREPORTABLEFRINGE BENEFITSAMOUNTS

Thisquestionisaboutreportablefringebenefits amountsthatyoureceived.Donotshowanamount lessthan$3,738.
ANSWERINg THIS QUESTION YouwillneedeveryPAYG payment summary individual non-businessandeveryPAYG payment summary foreign employmentyoureceivedthat showsreportablefringebenefitsamounts. COMPLETINg YOUR TAX RETURN Step 1 Addupthereportablefringebenefitsamountsshown onyourpaymentsummaries.
Ifanamountshownonyourpaymentsummaryis lessthan$3,738,donotincludeit.Checkwithyour employerthattheamountiscorrect.
Did you receive any reportable fringe benefits amount?

NO YES
GotoquestionIT2. Readon.
TAXPACK 2010
101
IT1IT7 Incometests
Step 2 WritethetotalatWitemIT1.Ifyourtotalislessthan $3,738,leaveWblank.GotoquestionIT2.
nannuitiesandsuperannuationincomestreams
thatyouhaveincludedatitem7.
IT2 REPORTABLEEMPLOYER SUPERANNUATIONCONTRIBUTIONS

Did your employer make reportable employer superannuation contributions on your behalf?
NO YES
IfyouhavereadtheSpecial circumstances sectionandyouarestillunsurewhetheryour pensionorbenefitistaxfree,thengotoourwebsite atwww.ato.gov.auandsearchforIncometests orphonetheIndividualInfoline,orcontacttheagency thatpaidyou.

NO YES
GotoquestionIT4. Readbelow.
ANSWERINg THIS QUESTION YouwillneedeveryPAYG payment summary individual non-business,PAYG payment summary foreign employmentandPAYG payment summary business and personal services incomeyoureceived thatshowsanamountofreportableemployer superannuationcontributions. COMPLETINg YOUR TAX RETURN Step 1 Addupthereportableemployersuperannuation contributionsamountsshownonyourpayment summaries.
Step 2 WritethetotalatTitemIT2.GotoquestionIT3.
ANSWERINg THIS QUESTION Incometaxisnotpaidontax-freegovernment pensionsorbenefits,however,thosepensionsor benefitsaretakenintoaccountwhenworkingout youradjustedtaxableincome(ATI).YourATImay affectyoureligibilityforcertaintaxoffsets. COMPLETINg YOUR TAX RETURN Step 1 Adduptheamountoftax-freepensionsorbenefits youreceivedduring200910.
Step 2 WritethetotalatUitemIT3.GotoquestionIT4.
IT4 TARGETFOREIGNINCOME
Thisquestionisabouttargetforeignincome. Target foreign incomeis: nanyincomeearned,derivedorreceivedfrom sourcesoutsideAustralia naperiodicalpaymentbywayofgiftsorallowances fromasourceoutsideAustralia naperiodicalbenefitbywayofgiftsorallowances fromasourceoutsideAustraliaprovidedthatthe amounthasnotbeen includedinyourtaxableincome,or receivedintheformofafringebenefit. Typesofforeignincomeyouneedtoshowatthis iteminclude: nregularreceiptsofmoneyandgiftsfrom relativeslivingoverseaswhichareexempt fromAustraliantax nincomefromforeignbusinessinterestsand investments,whichareexemptfromAustralian tax,includingincomereceivedbymigrantswith businessinterestsintheircountryoforigin
TAXPACK 2010
IT3 TAX-FREEGOVERNMENT PENSIONSORBENEFITSFORTHE PURPOSESOFTHEINCOMETESTS

Thisquestionisaboutcertaintax-freegovernment pensionsorbenefitsthatyoureceivedin200910. SeeSpecial circumstancesforalistoftherelevant tax-freegovernmentpensionsandbenefits.
Did you receive a tax-free government pension or benefit that is listed in the Special circumstances section?
Donotincludeatthisitem: nAustralianGovernmentallowancesandpayments thatyouhaveincludedatitem5 nAustralianGovernmentpensionsandallowances thatyouhaveincludedatitem6
102
Incometests IT1IT7
nforeignsourceincomereceivedwhileyou
wereatemporaryresidentthatisexemptfrom Australiantax ntheamountofexemptforeignemploymentincome youhaveshownatNitem20. Formoreinformationaboutincometestsandtarget foreignincome,gotowww.ato.gov.auandsearch forIncometests.Ifyouarestillnotsurewhether anyforeignincomeyouhavereceivedistarget foreignincome,phonetheIndividualinfoline.
IT5 NETFINANCIAL INVESTMENTLOSS

During the 200910 income year, did you receive income from or claim deductions in relation to any of the following types of investments: n shares n an interest in a managed investment scheme n rights or options in respect of any of your shares or interests in a managed investment scheme n distributions from a partnership that included income or losses from an investment listed above n interests in trusts that you provided consideration to acquire n any investment that is of a similar nature to those listed above?
Weconsiderthatifafinancialinvestmentisheldby atrustthenforthepurposesoftheincometeststhe trusteewillgenerallybetheowneroftheinvestment.
NO YES
Did you receive any target foreign income?

NO YES
ANSWERINg THIS QUESTION Youwillneeddetailsofanytargetforeignincome thatyoureceivedin200910plusthedetailsofany exemptforeignemploymentincomeyouincludedat Nitem20. COMPLETINg YOUR TAX RETURN ShowallforeignincomeinAustraliandollars. Informationonhowtoconvertyourforeignincome isavailableonourwebsite,oryoucanphonethe Individualinfolinetogetinformationaboutthe exchangerates.
Step 1 Addupallthetargetforeignincomeyouearned, derivedorreceivedduring200910.Theamount youhaveshownatNitem20formspartofyour targetforeignincome. Step 2 WritetheresultatVitemIT4.
Thelossyoushowatthisitemistheamountbywhich yourdeductionsrelatingtoyourfinancialinvestments exceedyourincomefromthoseinvestments. Donotincludeanyofthefollowingwhencalculating yournetfinancialinvestmentloss: ninterestfromyoureverydaytransactionsaccounts ncapitalgains ncapitallosses. Yournetfinancialinvestmentlossdoesnotaffect thewayweworkoutyourtaxableincome.You arestillabletoclaimallowabletaxdeductionsfor expenditureyoumakeinrelationtoyourfinancial investments.
ANSWERINg THIS QUESTION Youwillneedaccountstatementsorother documentationfromyourfinancialinstitutionorother sourcesthatshowyourfinancialinvestmentincome. Youwillalsoneeddocumentationshowingthe amountofdeductionsyoucanclaiminrespectof yourfinancialinvestments(suchasinterest).
TAXPACK 2010
103
IT1IT7 Incometests
Ifyouareapartnerinapartnershipyouwillneeda statementoradviceshowingtheamountofnet financialinvestmentincomeorloss.
Managed investment schemes Theinvestmentmanagerwillbeabletotellyou whetheryourinvestmentisamanagedinvestment scheme(thatis,aschemeregisteredunderthe Corporations Act 2001). Managedschemesinclude: n cashmanagementtrusts n propertytrusts n Australianequity(share)trusts n internationalequitytrusts n agriculturalschemes(whichincludehorticultural, aquacultureandcommercialhorsebreedingschemes) n somefilmschemes n sometime-shareschemes n somemortgageschemes n activelymanagedstratatitleschemes.
Investmentsthatarenot managed investment schemesinclude: n regulatedsuperannuationfunds n approveddepositfunds n debenturesissuedbyabodycorporate n barterschemes n franchises n directpurchasesofsharesorotherequities n schemesoperatedbyanAustralianbankintheordinary courseofbankingbusiness(suchastermdeposits).
Deductions Allowabledeductionsyoucanclaimforaninvestment include,butarenotlimitedto,expensesyoupayto: n borrowmoneytopurchaseaninvestment n manageyourinvestments n obtainadviceaboutchangesinthemixofyour investments.

Theexpensesshouldbetakenintoaccountonlyto theextentthattheyareattributabletoyourfinancial investments.
COMPLETINg YOUR TAX RETURN Step 1 Completeitems11,D7andD8onyourtaxreturn anditems13,20,23,24,D15andD16onyourTax return for individuals (supplementary section) 2010if theyapplytoyou.
Step 2 Completetheworksheetbelow. WORKSHEET Working out your net financial investment loss Financial investment income DividendsfromAustralian sharesfromitem11: unfrankedamount frankedamount frankingcredit Managedinvestmentscheme incomefromUitem13 Dividendincomefromforeign companiesfromMitem20 Forestrymanagedinvestment schemeincomefromAitem23 Anyotherincomefrom afinancialinvestmentfrom item24 Addallamountsfrom(a)to(g). $ $ $ $ $ $ $ (a) (b) (c) (d) (e) (f)
Forestry managed investment schemes Formoreinformationaboutforestrymanaged investmentschemes,seequestion23inTaxPack 2010 supplement. Rights and options Toworkoutyourfinancialinvestmentloss,youneedto includeincomeanddeductionsfromrightsandoptions youholdovershares,andinterestsinmanaged investmentschemes.Rightsandoptionsinclude: n warrants n futurecontracts n options.
Ifyouarenotsurewhetheraninvestmentyou holdisafinancialinvestment,gotoourwebsite atwww.ato.gov.auandsearchforIncometests. Ifyouarestillnotsure,phonetheIndividualinfoline.
104
(g) (h)
TAXPACK 2010
Incometests IT1IT7
Financial investment deductions Dividenddeductionsfrom AustraliansharesfromitemD8 $ (i)
IT6 NETRENTALPROPERTYLOSS
Thisquestionisaboutthenetloss,ifany,fromany rentalpropertyyouowned. Thisquestionisnotaboutcapitalgainsorcapital lossesfromyourrentalproperties.
Managedinvestmentscheme deductionsfromYitem13and $ HitemD8) Forestrymanagedinvestment schemedeductionsfromF itemD15 Deductionsattributableto yourfinancialinvestments fromJitemD16 Addallamountsfrom(i)to(l). Take(m)awayfrom(h). (Showalossasanegative.) Ifyouareapartnerinoneor morepartnerships,addup yourshareofallnetfinancial investmentincomeanddeduct yourshareofallnetlosses fromthepartnerships financialinvestments. Thestatementofdistribution fromeachpartnershipshould showtheseamounts.(Showan $ overalllossat(o)asanegative.) Add(n)and(o). $
(j)
Did you earn rental income or claim rental deductions, or receive a partnership distribution that included rental income or losses?
NO YES
(k)
$ $ $
(l) (m) (n)
Thenetrentalpropertylossthatyouworkouthere doesnotaffectthewayweworkoutyourtaxable income.Youcanstillclaimallowabletaxdeductions forexpenditureonyourrentalproperties.
ANSWERINg THIS QUESTION YouneeddetailsandrecordsshowingyourAustralian rent,foreignrentandyourshareofanyrentthatyou receivedasapartnerinapartnership.Youwillalsoneed documentationshowingtheamountofanydeductions thatyouareentitledtoinrespectofthatrent.

Youneedyourstatementofpartnershipdistribution (thepartnershiptaxreturnstatementofdistribution) showingyourshareofthenetrentalincomeorloss fromyourpartnership.
(o) (p)
Weconsiderthatiftherentalpropertyisheldby atrustthenforthepurposesoftheincometeststhe trusteewillgenerallybetheowneroftheproperty.
Iftheamountat(p)isnegative,writethisamount atXitemIT5.OtherwiseleaveXblankandgoto questionIT6.
COMPLETINg YOUR TAX RETURN Step 1 Completeitems13,20and21onyourTax return for individuals (supplementary section) 2010as applicable.
Step 2 Completeworksheet 1toworkoutyournetrental propertyloss. Whereyouhaveshownanamountasalosson yourtaxreturn,showitasanegativeamountin worksheet 1.
TAXPACK 2010
105
IT1IT7 Incometests
WORKSHEET 1 Working out your net rental property loss Netforeignrent (fromRitem20) Netrent(fromitem21) Shareofnetrentalproperty incomeorlossfromthe partnershiptaxreturn statementofdistribution Add(a),(b)and(c). Sumofthelow-valuepool deductionsrelatingtoyour rentalpropertiesfromitemD6 onyourtaxreturnoritemP8 onyourBusiness and professional items schedule for individuals 2010 Takeaway(e)from(d). $ $ (a) (b)
IT7 CHILDSUPPORTYOUPAID
Thisquestionisaboutamountsyoupaidorbenefits youprovidedtoanotherpersonotherthanyour partnerforthemaintenanceofyournaturalor adoptedchild. Note:Donotincludeamountsyoupaidorprovided toapersontoacquiregoodsorservices.
Did you pay amounts or provide benefits to another person for the maintenance of your child?
NO
$ $
(c) (d)
GotoSpouse details married or de facto onthenextpage. Readbelow.
YES
ANSWERINg THIS QUESTION Youwillneedtoknow,orworkoutfromyourrecords, thetotalamountsyoupaidorbenefitsyouprovided forthemaintenanceofyourchildduring200910.

$ $ (e) (f)
COMPLETINg YOUR TAX RETURN Step 1 Addupalltheamountsyoupaidandbenefitsyou providedforthemaintenanceofyourchildduring 200910.

Step 2 WritethetotalatZitemIT7.GotoSpouse details married or de facto onthenextpage.
Step 3 Iftheamountat(f)inworksheet 1isnegative(thatis, aloss)writethatamountatYitemIT6.Otherwisego toquestionIT7.
MORE INFORMATION Forincometestpurposes,theamountsyoupaid andthebenefitsyouprovidedforthemaintenance ofyourchildwillbedeductedfromthetotalofthe othercomponentsthatmakeupyouradjusted taxableincome. Formoreinformation,gotowww.ato.gov.auand searchforIncometests,orgotowww.csa.gov.au
106
TAXPACK 2010
Spouse details married or de facto
Yourspouseincludesanotherperson(whetherofthe samesexoroppositesex)who: nyouwereinarelationshipthatwasregisteredunder aprescribedstateorterritorylaw, nalthoughnotlegallymarriedtoyou,livedwith youonagenuinedomesticbasisinarelationship asacouple. Youmustcompletethissectionifyouhadaspouse during200910and: nyouconsenttousepartorallofyour2010tax refundtorepayyourspousesFamilyAssistance Office(FAO)debt,or nyoucompletedanyofthefollowingitems: T1 Spouse(withoutdependentchildorstudent) taxoffset T2 SeniorAustralianstaxoffset T3 Pensionertaxoffset M1 Medicarelevyreductionorexemption M2 Medicarelevysurcharge,andyouprintedX intheNOboxatE
T7 Superannuationcontributionson behalfofyourspouse(onthetaxreturn, supplementarysection) T10Parent,spousesparentorinvalidrelativetax offset(onthetaxreturn,supplementary section) T13Entrepreneurstaxoffset(onthetaxreturn, supplementarysection)butonlyifyouare requiredtoorchoosetocompletesteps810 inT13(seepages61inTaxPack 2010 supplement).
In 200910, did you have a spouse and fit into any of the categories in the previous column?
NO YES
GotoChecklistonpage110. Readbelow.
Ifyourspousesincomeforanyofthelabelsbelow iszero,youmustwrite0atthoseitemsonyour taxreturn.
ANSWERINg THIS QUESTION Youwillneed: nyourspousesPAYG payment summary individual non-business ntherelevantdistributionstatements,ifany,fortrust incomeandfamilytrustdistributiontax nifyourspousehaschildsupportobligations detailsoftheamountofchildsupportpaid duringtheincomeyear.Yourspousecanget thisinformationfromtheChildSupportAgency nifyourspousereceivedforeignincome detailsoftheamountofforeignincome receivedduringtheincomeyear nifyourspousehadfinancialinvestmentlosses thenetfinancialinvestmentlossamount nifyourspousehadrentalpropertylosses thenetrentalpropertylossamount nifyourspousehasclaimedadeduction forpersonalsuperannuationcontributions detailsoftheamountclaimed.
Ifyouhadmorethanonespouseduring200910, completethissectionwiththedetailsforyourspouse on30June2010,oryourlatestspouse.
COMPLETINg YOUR TAX RETURN Step 1 Printyourspousesnameintheboxesprovided onpage9ofyourtaxreturn.

Step 2 WriteyourspousesdateofbirthatKandprintX intherelevantboxforyourspousessex.Weuse thesedetailstoworkoutwhetheryourspouseis belowtheage-pensionage. Step 3 Ifyouhadaspouseforthefullyear,1July2009to 30June2010,printXintheYESboxatL. Ifyoudidnothaveaspouseforthefullyear,printX intheNOboxatLandwritethedatesyouhada spousebetween1July2009and30June2010 atMandN.
TAXPACK 2010
107
Spousedetailsmarriedordefacto
Step 4 IfyoucompleteditemsT1, T2, T3, M1 orM2or itemsT7, T10 orT13 onthesupplementarysection ofyourtaxreturn,followtheinstructionsbelow. If you completed itemT1 itemT2 orT3 itemM1 (VorW) itemM1(Yonly) itemM2 andyou printedX intheNO boxatE itemT7 itemT10 itemT13 you need to complete (where applicable) O, S,Q,A,B, C, D and E O,T,S,P,Q, A and D O O and Fifyouhada spouseon30June2010 O,T,U,S, A, D and Fif youhadaspouseforallof 200910oryourspouse diedduringtheyear O,SandA O,S,Q,A,B,C,DandE O,S,A,andDifyouhad aspouseon30June2010
Label U WriteatUdistributionstoyourspouseonwhich familytrustdistributiontaxhasbeenpaidwhichthey wouldhavehadtoshowasassessableincomeifthe taxhadnotbeenpaid.Ifthisamountiszero,write0. Checkthetrustdistributionstatements. Label S Addupthereportablefringebenefitsamountsshown onyourspousespaymentsummaries,andwritethe totalatS.Ifthisamountiszero,write0. Label P WriteatPtheamountofAustralianGovernment pensionsandallowancesthatyourspousereceived in200910(notincludingexemptpensionincome). Ifthisamountiszero,write0.AustralianGovernment pensionsandallowancesarelistedonpage12. Label Q WriteatQtheamountofanyexemptpensionincome thatyourspousereceivedin200910.Makesureyou includeonlyyourspousesexemptpensionincome. Ifthisamountiszero,write0.Exemptincomeislisted onpage111. Label A WriteatAyourspousesreportablesuperannuation contributions.Reportablesuperannuationcontributions arethesumofreportableemployersuperannuation contributionsandpersonaldeductiblesuperannuation contributions(seequestionD13onpagess379in TaxPack 2010 supplement).
Step 1 Addupthereportableemployersuperannuation contributionsamountsshownonyourspouses paymentsummaries. Step 2 Ifyourspouseclaimedadeductionforpersonal superannuationcontributionsatitemD13on theirtaxreturn(supplementarysection),addthe deductionamounttotheresultfromstep1. Step 3 Writeyourspousesreportablesuperannuation contributionsamountatA.
Label O WriteatOyourspouses200910taxableincome. Ifthisamountiszero,write0.Thisamountcanusually beobtainedfromyourspousestaxreturnornotice ofassessment.Ifyourspousedoesnothaveto lodgeataxreturn,provideanestimateoftheir taxableincome. Label T WriteatTanyamountofnetincomeofatrustthat thetrusteewasliabletopaytaxonbecauseyour spousewasunderalegaldisability,forexample,they wereabankrupt,wereapersonwhowasdeclared legallyincapablebecauseofamentalconditionor wereunder18yearsoldon30June2010.(Donot includeanyamountthathasalreadybeenincluded inyourspousestaxableincome,forexample,atO.) Ifthisamountiszero,write0.Checkthetrust distributionstatements.
108
TAXPACK 2010
Spousedetailsmarriedordefacto
Label b Ifyourspousereceivedanyofthefollowingtax-free governmentpensions,writethetotalamountthey receivedfortheincomeyearatB: n aspecialratedisabilitypensionunderPart6 ofChapter4oftheMilitary Rehabilitation and Compensation Act 2004 n apaymentofcompensationundersection68,71or 75oftheMilitary Rehabilitation and Compensation Act 2004 n apaymentofcompensationmentionedin paragraph234(1)(b)oftheMilitary Rehabilitation and Compensation Act 2004. Label C WriteatCthetargetforeignincomeyourspouse receivedduringtheincomeyear.Yourspousestarget foreignincomeis: n anyincomeamountearned,derivedorreceived fromsourcesoutsideAustraliaforyourspouses ownuseorbenefit,or n periodicalpaymentsorbenefitsbywayofgiftsor allowancesfromasourceoutsideAustraliathatis neitherincludedinyourspousestaxableincome norreceivedintheformofafringebenefit.
Itincludesanyforeignincomethatisnottaxablein Australia.Youshouldincludeanyexemptforeign employmentincomeshownatNitem20onyour spousestaxreturn.Allforeignincomemustbe translated(converted)toAustraliandollarsbefore youcompletethislabel.
Label E WriteatEthetotalamountofchildsupport(also knownasdeductiblechildmaintenanceexpenditure) incurredbyyourspousepaidtoanotherperson duringtheincomeyear.Theamountofchildsupport incurredisthetotalamountofanypaymentsor benefitsthatyourspousewasrequiredtopayor providetoanotherpersontomaintaintheirnatural oradoptedchild.However,youdonotcountany paymentsorbenefitsmadeorprovidedtoyouby yourspouseunlessyouliveapartonapermanent orindefinitebasis. Label F Ifyourspousestaxableincomeincludeda superannuationlumpsumthatyouincludedat(k) inworksheet 1onpage91,writethatamountatF. RefertoquestionM2onpages8994formore information.
Step 5 Ifyoudonotconsenttousepartorallofyour2010 taxrefundtorepayanyFamilyAssistanceOffice(FAO) debtofyourspouse,printXintheNObox.Youhave finishedthissection. Ifyoudoconsent,readbelow. Answeryestothisquestiononlyifallofthe followingapplytoyou. nYouwerethespouseofafamilytaxbenefit(FTB) claimantorthespouseofachildcarebenefit claimanton30June2010andyourincome wastakenintoaccountintheirclaim. nYourspousehasgivenyouauthoritytoquote theircustomerreferencenumber(CRN)onyour taxreturn(ifyourspousedoesnotknowtheirCRN, theycancontacttheFAO). nYourspousehasadebtduetotheFAOor expectstohaveanFAOdebtfor2010. nYouexpecttoreceiveataxrefundfor2010. nYouconsenttousepartorallofyourrefund torepayyourspousesFAOdebt. Ifyouconsent,printXintheYES box.Youmust completeyourspousesCRNatZ,andsignand datetheconsent.
Label D WriteatDyourspousestotalnetinvestmentloss. Yourspousestotalnetinvestmentlossisthesum ofanynetfinancialinvestmentlossandanynet rentalpropertyloss.Theinformationandworksheets atquestionsIT5andIT6willhelpyoutocomplete thislabel.
TAXPACK 2010
109
Checklist
Toavoidanydelayintheprocessingofyourtaxreturn, usethepre-addressedenvelopeprovidedwithyour TaxPack 2010,orusethefollowingaddress: Australian Taxation Office GPO Box 9845 IN YOUR CAPITAL CITY DonotreplacethewordsINYOURCAPITALCITY withthenameofyourcapitalcityanditspostcode.
When can you expect your notice of assessment? Ourstandardprocessingtimefortaxreturnsposted tousissixweeks.Ifyoulodgedyourtaxreturnonline usinge-tax,ourstandardprocessingtimeistwoweeks.
Writethedateyoulodgedyourtaxreturnhere:
CHECK THAT YOU HAVE writtenyourtaxfilenumber filledinallyourpersonaldetails,includingyourdate ofbirth,correctly filledintheappropriatedetailsforelectronicfunds transferifyouwanttohaveyourrefundpaiddirectly intoafinancialinstitutionaccount filledinthecodeboxes,ifyouwereaskedtodo so,atitems3,4,8,I,TOTAL INCOME OR LOSS, D1,D3,D4,SUBTOTAL,TAXABLE INCOME OR LOSS,T1,T2,T3,M1 andA1 completeditemM2thisiscompulsoryfor alltaxpayers completedincometestsitemsIT1toIT7ifrequired ifrequired,completedpages1316ofthetaxreturn (supplementarysection)andworkedthroughthe checklistonpages68inTaxPack 2010 supplement writtentotalsat: TOTAL TAX WITHHELD TOTAL INCOME OR LOSS TOTAL DEDUCTIONS SUBTOTAL TAXABLE INCOME OR LOSS TOTAL TAX OFFSETS completedSpouse details married or de facto ifrequired completedyourspousesdetailsandprovidedyour signatureonpage11ofyourtaxreturnifyouhave consentedtooffsetpartorallofyourtaxrefund againstyourspousesFamilyAssistanceOfficedebt ifyouwereunder18yearsoldon30June2010, completeditemA1thisiscompulsory(ifitis notcompleted,youmaybetaxedatahigherrate thannecessary) read,completed,signedanddatedtheTaxpayers declarationonpage12ofyourtaxreturn;failure todosowillresultinitbeingreturnedtoyouand penaltiesforlatelodgmentmaybeapplied attachedcopiesofalldocumentsorschedules whichTaxPack 2010tellsyoutoattach attachedpages1316ofyourtaxreturn (supplementarysection)topage12,ifyouhadto completethesepages keptcopiesofyourtaxreturn,allattachmentsand relevantpapersforyourownrecords.
110
Ifyoulodgedyourtaxreturnbypost,addsevenweeks toworkoutwhentoexpectyournoticeofassessment andwritethedatehere:
HOW WE WORK OUT YOUR TAX Ifyouwanttoworkoutyourtaxrefundordebtgoto www.ato.gov.au/calculators
INCOME
minus
ALLOWAbLE DEDUCTIONS
equals
TAXAbLE INCOME
TAX ON TAXAbLE INCOME

minus
TAX OFFSETS
equals
NET TAX PAYAbLE

plus
HELP AND SFSS REPAYMENTS

plus
MEDICARE LEVY AND SURCHARgE

minus
TAX CREDITS AND REFUNDAbLE TAX OFFSETS

equals
REFUND OR AMOUNT OWINg

TAXPACK 2010
Amounts that you do not pay tax on

Youmighthavereceivedamountsthatyoudonot needtoincludeasincomeonyourtaxreturn.We classifythemintothreedifferentcategories: nexempt income nnon-assessable non-exempt income nsomeother amountsthatarenottaxableand donotaffectanycalculationonyourtaxreturn. Themostcommontypesofexemptand non-assessablenon-exemptincomearelisted below.Ifyouarenotsurewhetherapaymentyouhave receivedisexemptincome,non-assessable non-exemptincomeorisanothertypeofamount thatisnottaxable,phonetheIndividualInfoline.
EXEMPT INCOME Exempt Australian government pensions, allowances and payments nCareradjustmentpayment(CAP) nCarerpaymentwhere: boththecarerandthecarereceiversareunder age-pensionage,or thecarerisunderage-pensionageandanyof thecarereceivershasdied nDefenceForceincomesupportallowance(DFISA) payabletoyouonadaywhenthewholeofyour socialsecuritypensionorbenefit,whichisalso payabletoyouonthatday,isexemptfromincome taxundersection52-10oftheIncome Tax Assessment Act 1997 nDisabilitysupportpensionpaidbyCentrelinkto apersonwhoisunderage-pensionage nDoubleorphanpension nInvalidityservicepensionwheretheveteranis underage-pensionage nPartnerservicepensionwhereeither: thepartner(excludingthenon-illnessseparated spouseofaveteran)andtheveteranareunder age-pensionageandtheveteranreceivesan invalidityservicepension,or thepartnerisunderage-pensionageandthe veteranhasdiedandwasreceivinganinvalidity servicepensionatthetimeofdeath nVeteransAffairsdisabilitypensionandallowances, warwidowsandwarwidowerspension nWifepensionwhereboththerecipientandtheir partnerareunderage-pensionage,ortherecipient isunderage-pensionageandtheirpartnerhasdied
Lumpsumbereavementpaymentsreceivedaspart ofanyoftheabovepaymentsareexemptonlyupto thetax-freeamount.PhonetheIndividualInfoline(see theinsidebackcover)tofindouthowmuchofyour paymentisexempt.
TAXPACK 2010
Exempt Australian government education payments nAllowancesforstudentsunder16yearsold, includingtheAustudypaymentandthose allowancespaidunderABSTUDY,YouthAllowance, theAssistanceforIsolatedChildrenSchemeandthe VeteransChildrenEducationScheme nApprenticeshipwagetop-up nThefirst$1,000ofanapprenticeshipearly completionbonusprovidedunderaspecified stateorterritoryschemeforoccupationswith skillshortages nAustralianAmericanEducationalFoundationgrant nCommonwealthscholarshipsorbursariesprovided toforeignstudents nCommonwealthsecondaryeducationassistance nCommonwealthTradeLearningScholarship nLanguage,literacyandnumeracysupplement nEndeavourawardsresearchfellowshipsoran EndeavourExecutiveAward nPaymentsundertheMilitaryRehabilitationand CompensationActEducationandTrainingScheme 2004foreligibleyoungpersonswhoseeligibilitywas determinedunder: paragraph258(1)(a)oftheMilitary Rehabilitation and Compensation Act 2004andtheeligible youngpersonwasunder16yearsold,or paragraph258(1)(b)oftheMilitary Rehabilitation and Compensation Act 2004 nPensionereducationsupplementandfares allowancepaidbyCentrelink nRentassistancepaidtoAustudyrecipients nSomescholarshipsandbursariesreceivedby full-timestudents nSupplementaryallowancesforstudentspaidunder theAssistanceforIsolatedChildrenScheme Other exempt Australian government payments nAustralianGovernmentdisasterrecoverypayments nBabybonuspaidbyCentrelink nCarerallowancepaidundertheSocial Security Act 1991 nChildcarebenefit nChildcarerebate nChilddisabilityassistanceunderPart2.19AAof theSocial Security Act 1991 nDFISAbonusandDFISAbonusbereavement paymentunderPartVIIABoftheVeterans Entitlements Act 1986 nFamilytaxbenefit nF-111deseal/resealex-gratialumpsumpayments
111
Amountsthatyoudonotpaytaxon
nLossofearningsallowancepaidunderthe
Veterans Entitlements Act 1986 nLumpsumpensionbonuspaidundertheSocial Security Act 1991ortheVeterans Entitlements Act 1986 nLumpsumpaymentmadeunderSection198Nof theVeterans Entitlements Act 1986 nMaternityimmunisationallowance nMobilityallowancepaidundertheSocial Security Act 1991 n Economicsecuritystrategypaymenttofamilies undertheA New Tax System (Family Assistance) (Administration) Act 1999orunderthescheme determinedunderSchedule4tothe Social Security and Other Legislation Amendment (Economic Security Strategy) Act 2008 n Economicsecuritystrategypaymentunder theSocial Security Act 1991 ortheVeterans Entitlements Act 1986orunderthescheme determinedunderSchedule4tothe Social Security and Other Legislation Amendment (Economic Security Strategy) Act 2008 nBacktoschoolbonusandsingleincomefamily bonuspaidundertheA New Tax System (Family Assistance) (Administration) Act 1999 nTrainingandlearningbonusundertheSocial Security Act 1991 nFarmershardshipbonusundertheSocial Security Act 1991 nEducationentrypaymentsupplementunderthe Social Security Act 1991 nPaymentsundertheschemedeterminedunder Schedule4totheHousehold Stimulus Package Act (No. 2) 2009 nTheex-gratiapaymentfromtheAustralian GovernmentknownasIncomerecoverysubsidy fortheVictorianbushfiresofJanuaryand February2009 nTheex-gratiapaymentfromtheAustralian GovernmentknownasIncomerecoverysubsidy fortheNorthQueenslandfloodsofJanuary andFebruary2009 nPaymentsfromtheAustralianGovernmentunder theincentivepaymentsschemerelatingtocertain privatehealthinsurancepolicies nPaymentstocarersundertheschemedetermined underSchedule4totheSocial Security and Veterans Affairs Legislation Amendment (One-off Payments and Other 2008 Budget Measures) Act 2008 nPensionbonusandpensionbonusbereavement paymentsunderPart2.2AoftheSocial Security Act 1991orPartIIIABoftheVeterans Entitlements Act 1986
nPharmaceuticalallowancespaidundertheSocial
Security Act 1991 nPharmaceuticalallowancespaidunderthe Veterans Entitlements Act 1986 nPhoneallowancepaidundertheSocial Security Act 1991 nPhoneallowancepaidundertheVeterans Entitlements Act 1986 nQuarterlypensionsupplementpaidundertheSocial Security Act 1991ortheVeterans Entitlements Act 1986 nRemoteareaallowance nRentassistance nSeniorsconcessionallowancepaidunder theSocial Security Act 1991ortheVeterans Entitlements Act 1986 nSeniorssupplementpaidundertheSocial Security Act 1991ortheVeterans Entitlements Act 1986 nSugarindustryexitgrantwhereyoucompliedwith theconditionofthegrantnottoownoroperateany agriculturalbusinesswithinfiveyearsafterreceiving thegrant nTobaccoindustryexitgrantwhereyoucomplied withtheconditionofthegrantnottoownor operateanyagriculturalbusinesswithinfiveyears afterreceivingthegrant nUtilitiesallowancepaidundertheSocial Security Act 1991 nUtilitiesallowancepaidundertheVeterans Entitlements Act 1986 nVeteranssupplementpaidundertheVeterans Entitlements Act 1986 nOuterregionalandremote(OR&R)paymentmade undertheHelpingChildrenwithAutismpackage
Exempt Australian Defence Force and United Nations payments nCertainpayandallowancesforAustralianDefence Forcepersonnelyouremployerwilladviseyouif anamountisexempt nCompensationpaymentsforimpairmentor incapacityresultingfromservicewithaUnited Nationsarmedforce nCompensationpaymentsmadeundertheMilitary Rehabilitation and Compensation Act 2004,except thosethatareincome-relatedpayments nPayandallowancesforpart-timeserviceinthe AustralianNaval,ArmyorAirForceReserve nSomeallowancespaidtoAustralianDefenceForce personnelwhoservedinprescribedoverseas areasyouremployerwilladviseyouifan allowanceisexempt
112
TAXPACK 2010
Amountsthatyoudonotpaytaxon
Other exempt payments nCertainannuitiesandlumpsumswhicharepaid toaninjuredpersonunderastructuredsettlement nCertaindistributionsfromanearlystageventure capitallimitedpartnership nCertaindistributionsfromapooleddevelopment fund nCertainpaymentsrelatingtopersecutionduring theSecondWorldWar nCertainprofitsorgainsfromdisposalofshares inapooleddevelopmentfund nJapaneseinternmentcompensationpaymentsmade undertheCompensation (Japanese Internment) Act 2001ortheVeterans Entitlements Act 1986 NON-ASSESSAbLE NON-EXEMPT INCOME Themostcommontypesofnon-assessable non-exemptincomeare: nthetax-freecomponentofanemployment terminationpayment(ETP) nthatpartofthetaxablecomponentofadeath benefitETPpaidtoadependantbelowthe 200910capof$150,000 nthetax-freecomponentofasuperannuationbenefit nthetaxedelementofasuperannuationincome streamorlumpsumreceivedbyaperson60years oldorolder nthetaxedelementofadeathbenefitsuperannuation incomestreampaidtoadeathbenefitdependant where thedeceasedwas60yearsoldorolderatthe timeoftheirdeath,or therecipientwas60yearsoldorolderwhenthe benefitwasreceived natax-freesuperannuationlumpsumbenefit paidtoapersonwithaterminalmedicalcondition existingatthetimewhenthelumpsumwas receivedorwithin90daysafteritsreceipt nNationalRentalAffordabilitySchemepayments ornon-cashbenefitspaidbyastateorterritory governmentorarelevantbodyestablishedunder astateorterritorylaw nasuperannuationlumpsumdeathbenefitreceivedby adependant,or someonewhoisnotadependantbutreceived thebenefitbecauseofthedeathofamember oftheAustralianDefenceForceoranAustralian policeforce(includingAustralianProtective Services)whodiedinthelineofduty
ngenuineredundancypaymentsandearlyretirement
schemepaymentsshownasLumpsumD amountsonyourpaymentsummary namountsonwhichfamilytrustdistributiontaxhas beenpaid(seequestionA4onpages66in TaxPack 2010 supplement) ninterestorotherearningscreditedtoafirsthome saveraccountthatyouholdorapaymenttoyou fromsuchanaccount ngovernmentcontributionspaidundertheFirst Home Saver Account Act 2008 nsuperco-contributions nthetaxbonuspaidundertheTax Bonus for Working Australians Act 2009.
Tax-free income for temporary residents Ifyouareatemporaryresidentyourforeignincome isnon-assessablenon-exemptincome,except incomeyouearnfromyouremploymentoverseas forshortperiodswhileyouareatemporaryresident.

Youareatemporaryresidentif: nyouholdatemporaryvisagrantedunderthe Migration Act 1958 nyouarenotanAustralianresidentwithinthe meaningoftheSocial Security Act 1991,and nyourspouse(ifyouhaveone)isnotanAustralian residentwithinthemeaningoftheSocial Security Act 1991. If,atanytimeonorafter6April2006,youhave beenanAustralianresidentfortaxpurposesbutnot atemporaryresident,youwillnotbeentitledtothe temporaryresidentexemptionsfromthattime,even ifyoulaterheldatemporaryvisa. Forfurtherinformation,seetheelectronicpublication Foreign income exemption for temporary residents introduction.Itisavailableonourwebsiteat www.ato.gov.au
OTHER AMOUNTS THAT YOU DO NOT PAY TAX ON Youdonotpaytaxonmostchildsupportand spousemaintenancepayments.
TAXPACK 2010
113
Do you need to lodge a tax return?

If any of the following applies to you then you must lodge a tax return.
REASON 1 During200910,youwereanAustralianresident andyou: npaidtaxunderthepayasyougo(PAYG) withholdingorinstalmentsystem,or nhadtaxwithheldfrompaymentsmadetoyou. REASON 2 YouwereeligiblefortheseniorAustralianstaxoffset (seepages6870)andyourrebateincome(not includingyourspouses)wasmorethan: n $29,867ifyouweresingle,widowedorseparated atanytimeduringtheyear n $28,600ifyouhadaspousebutoneofyoulived inanursinghomeoryouhadtoliveapartdueto illness(seethedefinitionofHad to live apart due to illnessonpage71),or n $25,680ifyoulivedwithyourspouseforthe fullyear.
Seepage67toworkoutyourrebateincomeoruse thecalculatoratwww.ato.gov.au
REASON 5 YouwerenoteligiblefortheseniorAustralianstax offsetandyoudidnotreceiveapaymentlistedat question5or6onpages11and12,butyourtaxable incomeexceeded: n $6,000 ifyouwereanAustralianresidentfortax purposesforthefullyear n $3,000 ifyouwereunder18yearsoldat30June 2010andyourincomewasnotsalaryorwages n $1ifyouwereanon-residentandyouhadincome taxableinAustraliawhichdidnothavenon-resident withholdingtaxwithheldfromit,or n your part-year tax-free threshold amountifyou becameorstoppedbeinganAustralianresidentfor taxpurposes.Gotowww.ato.gov.auandsearch forPart-yeartax-freethresholdamounttowork outyourthresholdamountorphonetheIndividual Infolineon13 28 61. OthER REASONS Youmustlodgeataxreturnifanyofthefollowing appliedtoyou. nYouhadareportablefringebenefitsamountonyour PAYG payment summary individual non-business orPAYG payment summary foreign employment. nYouhadreportableemployersuperannuation contributionsonyourPAYG payment summary individual non-businessor PAYG payment summary foreign employment. nYouwereentitledtotheprivatehealthinsurancetax offsetseequestionT5onpage73. nYoucarriedonabusiness. nYoumadealossoryoucanclaimalossyoumade inapreviousyear. nYouwere60yearsoldorolderandyoureceivedan Australiansuperannuationlumpsumthatincluded anuntaxedelement. nYouwereunder60yearsoldandyoureceivedan Australiansuperannuationlumpsumthatincluded ataxedelementoranuntaxedelement. nYouwereentitledtoadistributionfromatrustor youhadaninterestinapartnershipandthetrust orpartnershipcarriedonabusinessofprimary production. nYouwereanAustralianresidentfortaxpurposes andyouhadexemptforeignemploymentincome and$1ormoreofotherincome.(Pagess206in TaxPack 2010 supplementexplainwhatismeant byexemptforeignemploymentincome.For 200910andsubsequentyears,thereare changeslimitingtheexemptionforforeign employmentincome.)
REASON 3 YouwerenoteligiblefortheseniorAustralianstax offsetbutyoureceivedapaymentlistedatquestion5 onpage11andothertaxablepaymentswhichwhen addedtogethermadeyourtaxableincomemorethan $15,000. REASON 4 YouwerenoteligiblefortheseniorAustralianstax offsetbutyoureceivedanAustralianGovernment pension,allowanceorpaymentlistedatquestion6 onpage12andyourrebateincomewasmorethan: n $27,697ifyouweresingle,widowedorseparated atanytimeduringtheyear n $26,671ifyouhadaspousebutoneofyou livedinanursinghomeoryouhadtoliveapart duetoillness n $22,784ifyoulivedwithyourspouseforthe fullyear.
114
TAXPACK 2010
Doyouneedtolodgeataxreturn?
nYouareaspecialprofessionalcoveredbythe
incomeaveragingprovisions.Theseprovisions applytoauthorsofliterary,dramatic,musicalor artisticworks;inventors;performingartists; productionassociatesandactivesportspeople. nYoureceivedincomefromdividendsordistributions exceeding$6,000(or$416ifyouwereunder 18yearsoldon30June2010)andyouhad: frankingcreditsattached,or amountswithheldbecauseyoudidnotquoteyour taxfilenumberorAustralianbusinessnumberto theinvestmentbody. nYoumadepersonalcontributionstoacomplying superannuationfundorretirementsavings accountandwillbeeligibletoreceiveasuper co-contributionforthesecontributions. nYouwereeitheraliableparentorarecipient parentunderachildsupportassessmentunless youreceivedAustralianGovernmentallowances, pensionsorpayments(whethertaxableorexempt) forthewholeoftheperiod1July2009to30June 2010,andthetotalofallthefollowingpayments waslessthan$19,618: taxableincome exemptAustralianGovernmentallowances, pensionsandpayments targetforeignincome(seeIT4 Target foreign income) reportablefringebenefits netfinancialinvestmentloss(seeIT5 Net financial investment loss) netrentalpropertyloss(seeIT6 Net rental property loss)and reportablesuperannuationcontributions.
Education tax refund Ifyoudontneedtolodgeataxreturnfor200910, youcanclaimyoureducationtaxrefundbycompleting theapplicationEducation tax refund for individuals 2010(NAT72621)andlodgingitbymailorphone on13 28 65. However,youcannotlodgeitbyphoneifyouare alsolodginganapplication for a refund of franking credits.Inthatcaseyoumustsendallyourclaimsto ustogetherinoneenvelope,oryoucouldusee-tax. First home saver account Ifyouhadafirsthomesaveraccountin200910and believeyouareentitledtoafirsthomesaveraccount governmentcontribution,youmustlodgeeither: nanincometaxreturn,or nanotificationofeligibilityifyouarenotrequired tolodgeanincometaxreturnandyouwerean Australianresidentforatleastpartoftheincome year.Youcanfindthisformonourwebsiteat www.firsthomesaver.gov.au
If you have read all the above information and know that you do not have to lodge a tax return, you should complete the non-lodgment advice on the next page and send it to us unless one of the following applies to you: nYouhavealreadysentusataxreturn,non-lodgment advice,formorlettertellingusthatyoudonotneed tolodgeataxreturnforallfutureyears. nYouarelodginganapplicationforarefundof frankingcreditsfor2010. nYouarelodginganapplicationforaneducation taxrefundfor2010. nYouronlyincomewasfromanallowanceor paymentlistedatquestion5onpage11oryou receivedapension,paymentoranallowancelisted atquestion6onpage12and yourrebateincomewaslessthantherelevant amountinreason 2(ifyouareeligibleforthe seniorAustralianstaxoffset),or yourtaxableincomewaslessthantherelevant amountinreason 3(theagenciesthatpaidyou haveprovidedinformationforustodeterminethat youdonotneedtolodgeataxreturn),or yourrebateincomewaslessthantherelevant amountinreason 4(theagenciesthatpaidyou haveprovidedinformationforustodeterminethat youdonotneedtolodgeataxreturn).
Deceased estate Ifyouarelookingaftertheestateofsomeonewho diedduring200910,consideralltheabovereasons ontheirbehalf,andifataxreturnisnotrequired completeNon-lodgment advice 2010onthenext pageandsendittous.Ifataxreturnisrequired, seepage4formoreinformation. Franking credits Ifyoudontneedtolodgeataxreturnfor200910, youcanclaimarefundoffrankingcreditsbyusing thepublicationRefund of franking credits instructions and application for individuals 2010(NAT4105)and lodgingyourclaimbymailorphoneon13 28 65.
However,youcannotlodgeitbyphoneifyouarealso lodginganapplicationforeducation tax refund.In thatcaseyoumustsendallyourclaimstoustogether inoneenvelope,oryoucouldusee-tax.
TAXPACK 2010
115
Doyouneedtolodgeataxreturn?
Non-lodgment advice
1 July 2009 to 30 June 2010 Print neatly in BLOCK LETTERS with a black or blue ballpoint pen only. Do not use correction fluid or tape.
2010
Your tax file number

DAY MONTH YEAR
WeareauthorisedbytheTaxation Administration Act 1953 torequestyoutoquoteyourtaxfile number(TFN).Itisnotanoffencenottoquote yourTFN.However,yourTFNhelpsusto identifyyourtaxrecordscorrectly.
Your date of birth Your name

Title(forexample, Mr,Mrs,Ms,Miss) Surnameorfamilyname Givennames
Your postal address

Suburbor town State Postcode Country
ifnot Australia
Have you changed your postal address since your last tax return?
NO YES Printtheaddressonyour lastnoticeofassessment ortheaddressyoulast toldusabout. Suburbor town State Postcode
Country
ifnot Australia
Your phone number during business hours if it is convenient

Areacode Phone number Iwillnothavetolodgeataxreturnfor200910because noneofthereasonslistedonpages11415apply.
Reason for not lodging a tax return

Iwillnothavetolodgeatax returnforfutureyearsbecause:
IdeclarethattheinformationIhavegivenonthisnon-lodgmentadviceistrueandcorrect.Seetheprivacynotesonpage128.
DAY MONTH YEAR
Signature
Date
The tax law imposes heavy penalties for giving false or misleading information. Use the pre-addressed envelope provided with TaxPack 2010 to send us your non-lodgment advice by 31 October 2010. If you are not using the pre-addressed envelope, see page 126 for more information and the address to use.
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TAXPACK 2010
Special circumstances and glossary

Thissectionisapublicrulinginaccordance withDivision358ofSchedule1totheTaxation Administration Act 1953forindividualswhouseit reasonablyandingoodfaithtocompletetheir2010 personalincometaxreturn. Thismeansthatifwestatethelawincorrectlyinthis section,orouradviceontheapplicationofthelawin thissectionisincorrectandasaresultyoudonotpay enoughtax,wewillnotaskyoutopaytheextratax. Signyourscheduleandattachittopage3ofyour taxreturn.PrintX intheYES boxatTaxpayers declaration question2a onpage12ofyourtaxreturn. Wewillworkouttheamountofwithholdingtax youhavetopayonthedividends,andadviseyou oftheamount.
NON-RESIDENT WITHHOLDINg TAX gross interest Ifyouwereanon-residentincludeatitem10any interestthatyoureceivedin200910whileyouwere aresidentofAustralia.

Donotincludeatitem10 anyinterestpaidorcredited toyouwhenyouwereanon-residentifwithholding taxwasdeducted. Ifwithholdingtaxwasnotdeducted,onaseparate pieceofpaper: n printSCHEDULEOFADDITIONALINFORMATION ITEM10 n printyourname,addressandtaxfilenumber n providedetailsofamountsofinterestyoureceived whileyouwereanon-residentifwithholdingtaxwas notdeducted. Signthescheduleandattachittopage3ofyour taxreturn.PrintXintheYES boxatTaxpayers declaration question2a onpage12ofyourtaxreturn. Wewilladviseyouoftheamountofwithholding taxyouhavetopayonthisinterest.
FOREIgN EMPLOYMENT TERMINATION PAYMENTS Anemploymentterminationpayment(ETP)that youreceivedduetoterminationofyouremployment overseasisaforeignemploymenttermination payment(foreignETP): n whereyouwereanAustralianresidentfortheperiod ofyouremployment n wherethepaymentwasexemptfromincome taxunderthatcountryslaws,and n whetherornotyourforeignemployerhasan Australianbusinessnumber(ABN)orhasgiven youaPAYG payment summary employment termination payment.
Note: AforeignETPisdifferentfromaforeign terminationpayment(FTP);seethedefinitionon page123.
Dividends Donotincludeatitem11anydividendincome paidorcreditedtoyouduringtheperiodyouwere anon-resident,if: n thedividendwasfullyfranked,or n thedividendwasnotfullyfranked,buteither thedividendstatementshowstheunfranked amounttobeconduitforeignincome,or withholdingtaxwas(orshouldhavebeen) withheldfromtheunfrankedamount.
Youneedtoprovidedetailsofanydividend n thatwaspaidorcreditedtoyouduringanyperiod youwereanon-resident n thatwasnotfullyfrankedandwasnotdeclared tobeconduitforeignincome,and n onwhichyouhavenotpaidwithholdingtax. Onaseparatepieceofpaper: n printSCHEDULEOFADDITIONALINFORMATION ITEM11 n printyourname,addressandtaxfilenumber n providedetailsofthedividend.
TAXPACK 2010
Instructions for foreign ETPs YouneedtoconvertyourforeignETPsintoAustralian dollarsbeforeyoucancompleteitem4.Forinformation aboutexchangeratesandhowtoconvertforeign payments,gotoourwebsiteorphonetheIndividual Infoline(seetheinsidebackcover). n Thenonaseparatepieceofpaper: printSCHEDULEOFADDITIONALINFORMATION ITEM4 printyourname,addressandtaxfilenumber foreachforeignETP,printthenameofthepayer andtheforeigncountryinwhichyouwere employed,andwritetheamountofthepayment foreachforeignETP,printtheappropriatecode letter(fromthoselistedatstep4inquestion4 Employment termination paymentsonpage10) orprintNOCODELETTERAPPLIES. n Signyourscheduleandattachittopage3ofyour taxreturn. n PrintXintheYES boxatTaxpayers declaration question2a onpage12ofyourtaxreturn.
Youwillneedtoincludethetotalamountofthese foreignETPsintheamountyoushowatIitem4 on yourtaxreturn. Gotostep1inquestion4 Employment termination payments onpage9.
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Specialcircumstancesandglossary
DIVIDENDS AND FRANKINg CREDITS Ifyouareclaimingfrankingcreditsatitem11,certain rulesapply.Readthefollowingtocheckthatyouare entitledtoclaimthecredits. Holding period rule Tobeabletoclaimthefrankingcreditstheholding period rule requiresyoutoholdsharesatriskfor atleast45days(90daysforpreferenceshares).
Whenworkingoutthenumberofdaysyouheldthe sharesatrisk,donotcountthedayonwhichyou acquiredthesharesandthedayonwhichyoudisposed oftheshares(oryouenteredintoanarrangementto reducetheriskofmakingalossonthem). Evenifyoudonotholdthesharesatriskforthe requiredperiodyoumaystillbeentitledtoclaim thefrankingcreditsif: nyourtotaldirectandindirectfrankingcredit entitlementfortheincomeyear,includingany
entitlementyoumayhavethroughatrustor partnership,isnotabove$5,000,and n herelated payments rule doesnotapplytoyou. t Theholdingperiodrulemayalsoapplyif,withinthe holdingperiod,youenteredintoanarrangementto reducetheriskofmakingalossonyourshares,such asthroughderivatives,hedges,optionsandfutures. Ifyoudonotsatisfytheholdingperiodrule,include thefrankedamountofthedividendatT item11 butdonotincludeanyfrankingcreditamountat U item11 forthatdividend.
Related payments rule Therelatedpaymentsruleappliestoarrangements enteredintoafter7.30pm(AustralianEastern StandardTime)on13May1997.Broadly,itapplies toyouifyouwereunderanobligationtomake,or werelikelytomake,arelatedpaymentforadividend
AUSTRALIAN SUPERANNUATION LUMP SUM PAYMENTS Table 1setsoutthetaxratesthatapplytosuperannuationlumpsumpayments. Youmayfindthisusefulincompletingitems8,M1andM2.

TAbLE 1 Tax rates applicable to the taxable components of superannuation lump sums TheMedicarelevyisadditionalwhereapplicable. Your age at the time of payment Death benefitpaidto: dependant non-dependant Anyage Anyage Whole Whole Taxfree 15% Whole Whole Taxfree 30% Taxed element Amount Tax rate Untaxed element Amount Tax rate
Superannuation lump sum (otherthandeathbenefit) Under55yearsold Whole 20% Upto$1,100,000 Over$1,100,000 55to59yearsold Upto $150,000* Over $150,000* 0% 15% Upto$150,000* Over$150,000* upto$1,100,000 Over$1,100,000 60yearsandover Whole Taxfree Upto$1,100,000 Over$1,100,000 30% 45% 15% 30% 45% 15% 45%
*Thelow-ratecapcouldbelessthan$150,000ifbeforeJuly2008youreceivedaneligibleterminationpaymentafteryour55thbirthdayorhave receivedasuperannuationlumpsuminapriorincomeyearthatcountedtowardsyourentitlementtoasuperannuationlumpsumtaxoffset.
118 TAXPACK 2010
andyoudidnotholdyoursharesatriskforatleast 45days(90daysforpreferenceshares). Whenworkingoutthenumberofdaysyouheldthe sharesatrisk,donotcountthedayonwhichyou acquiredthesharesandthedayonwhichyoudisposed oftheshares(oryouenteredintoanarrangementto reducetheriskofmakingalossonthem). A related payment includes you, or an associate of yours, doing something under an arrangement that has the effect of passing the benefit of the dividend to someone else. If either the holding period rule or related payments rule is likely to affect you, see You and your shares 2010 (NAT 2632). Thisruleappliestosharesboughtonorafter 1July1997.
Youcanclaimadeductionforthedeclineinvalueofa leasedluxurycar(butnotforotherleasedcars).Thecar canbeneworsecond-hand.Youmustuseeitherthe: n one-thirdofactualexpensesmethod,or n logbookmethod. Whenclaimingadeductionfordeclineinvalue,the initialvaluethatyouuseforthecaristhelimitthat appliedintheincomeyearinwhichtheleasebegan. TAbLE 2 Luxury car limits for the past 10 years 200910 200809 200708 200607 200506 $57,180 $57,180 $57,123 $57,009 $57,009 200405 200304 200203 200102 200001 $57,009 $57,009 $57,009 $55,134 $55,134
LEASED LUXURY CARS Ifyouleasedaluxurycarandwishtoclaima deductionatitemD1 orD2,thefollowinginformation aboutluxurycarswillhelpyou.

Aleasedluxurycarisaleasedcarthatatthetimethe leasebegancostmorethantheluxurycarlimitthat appliedintherelevantincomeyear. TAbLE 3 Travel expense records
WORK-RELATED TRAVEL EXPENSES Table 3outlinestheevidenceyouneedtokeepto claimovernighttravelexpenses.
Domestic travel Written evidence If you did not receive a travel allowance: travellessthan6nightsinarow travel6ormorenightsinarow Yes Yes No Yes Travel diary1
Overseas travel Written evidence Travel diary1
Yes Yes
No Yes
If you received a travel allowance and your claim does not exceed the reasonable allowance amount: travellessthan6nightsinarow travel6ormorenightsinarow No No No No No2 No2 No Yes3
If you received a travel allowance and your claim exceeds the reasonable allowance amount: travellessthan6nightsinarow travel6ormorenightsinarow
1 2
Yes Yes
No Yes
Yes Yes
No Yes3
Atraveldiaryisadocumentinwhichyourecordthedates,places,timesanddurationofyouractivitiesandtravel. Writtenevidenceisrequiredforoverseasaccommodationexpensesregardlessofthelengthofthetrip. 3 Membersofinternationalaircrewsdonothavetokeepatraveldiaryiftheylimittheirclaimtotheamountoftheallowancereceived.
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RULES FOR CERTAIN TYPES OF gIFTS OR DONATIONS Thefollowinginformationisaboutdifferenttypes ofgiftsordonationsforwhichyoumaybeable toclaimadeductionatitemD9. gifts of property Youcanclaimadeductionforagiftofproperty (suchasland,artworkormemorabilia)toan approvedorganisationif: n youpurchasedthepropertywithin12months ofmakingthegift,or n youpurchasedthepropertymorethan12months beforeyoumadethegiftandtheAustralianValuation Office(AVO)valueditatmorethan$5,000.
Ifyoupurchasedthepropertywithin12monthsof makingthegift,theamountdeductibleisthemarket valueofthepropertyatthetimeofthegiftorthe amountyoupaidfortheproperty,whicheverisless. Ifyoupurchasedthepropertymorethan12months beforeyoumadethegiftandtheAVOvalueditat morethan$5,000,theamountdeductibleisthe valueofthepropertyasdeterminedbytheAVO. Youcannotclaimadeductionforagiftofproperty ifyoudidnotpurchaseit(forexample,youinherited orwontheproperty)unlesstheAVOhasvaluedit atmorethan$5,000. Ifyouhavemadeagiftofpropertyunderthe CulturalGiftsProgramtherulesdescribedabovedo notapplytoyou.Formoreinformationonworking outwhetheryoucanclaimadeductionforagift underthisprogram,readthepublicationCultural Gifts (NAT8236)orphonetheIndividualInfoline(seethe insidebackcover). Formoreinformationaboutpropertyvaluations, phonetheAVOon1300 356 780,fax1300 357 267 orvisittheirwebsiteatwww.avo.gov.au
n thecontributionmeetscertainconditions,and n thebenefityoureceiveddoesnotexceed
aspecifiedlimit.
Afund-raisingeventincludesafete,ball,galashow, dinner,performanceorsimilarevent. Youcanclaimadeductionifyoumade: n acontributionofmoneyorpropertytoattend orparticipatein(orfortherighttoattend orparticipatein)afund-raisingevent,or n acontributionofmoneytopurchasegoods orservicesatacharitableauction. Yourcontributionmustmeetthefollowingconditions. n Itwasmadetoanapprovedorganisation. n Ifitwasmoney,itwasmorethan$150. n Ifitwasproperty,youhadeither: purchaseditwithin12monthsofmakingthe contribution,andboththemarketvalueonthe dayofthecontributionandthepurchaseprice weremorethan$150,or owneditformorethan12monthsandthe AVOvalueditatmorethan$5,000. n Ifitwaspubliclylistedshares,thevaluewasmore than$150andlessthanorequalto$5,000. n Thefund-raisingeventwasheldinAustralia. n TheGST-inclusivemarketvalueoftheminorbenefit youreceivedforyourcontributionmusthavebeen worthnomorethan$150or20%ofthevalueofthe contribution,whicheverisless.Thereceiptfromthe approvedorganisationwillshowthemarketvalueof theminorbenefityoureceived. Yourdeductionisthevalueofyourcontribution thatsatisfiestheconditionssetoutaboveless the GST-inclusivemarketvalueoftheminorbenefityou received.Bothoftheseamountsappearonyour receipt. Thereisnolimittothenumberofdeductionsyou canclaimforsuccessfulbidstopurchasegoodsor servicesatacharitableauction,providedtheabove conditionsaremet.
Receiving a benefit Generally,youcannotclaimadeductionfora donationifyoureceivedsomethinginreturn(for example,araffleticket,dinnerorareductionin yourchildsschoolfees)otherthantokenslikelapel badgesandstickersthatpromotetheorganisation. Thisruledoesnotapplytocertainfund-raisingevents (seethenextcolumn). Deductions for contributions relating to fund-raising events Youcanclaimadeductionforcontributionsto approvedorganisationsthatrelatetofund-raising eventswhereyoureceivedaminorbenefitfor yourcontribution,providedthat:
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gifts of shares valued at $5,000 or less Youcanclaimadeductionforagiftofsharestoan approvedorganisationif: n theshareswereheldinacompanythatwaslisted onanapprovedAustralianstockexchangeonthe daythegiftwasmade n youacquiredthesharesatleast12monthsbefore makingthegift(acquiredincludespurchased, inherited,wonorreceivedasagiftorabonus) n theparcelofshareshadamarketvalueof$5,000 orlessonthedayyoumadethegift n theparcelofshareswasvaluedat$2ormore.
TAXPACK 2010
Youcannotclaimadeductionforsharesthatare suspendedfromtrading(otherthanameretradinghalt). Giftsofsharesheldindifferentcompaniesare separategiftsevenifgivenatthesametime. Adeductionisalsoavailabletoyouwhereyou contributethesharesinreturnforarightpermitting youoranotherindividualtoattendorparticipatein aparticularfund-raisingeventinAustralia.Thegift mustsatisfytherulesforcontributionstofund-raising events(seethepreviouspage),themarketvalueof thesharesonthedaytheyarecontributedmustbe morethan$150butlessthanorequalto$5,000,and themarketvalueoftherighttoattendorparticipate inthefund-raisingeventmustnotexceed20%ofthe valueofthesharesor$150,whicheverisless. Beawarethatcapitalgainstaxapplieswhenyou makeagiftofshares.
Parliament,astateparliament,orthelegislative assemblyoftheNorthernTerritoryorAustralian CapitalTerritory. Anindependentcandidateisanindividualwhose candidatureinanelectionforparliamentisnot endorsedbyaregisteredpoliticalparty.An independentmemberisamemberofparliamentwho isnotamemberofaregisteredpoliticalparty.
AUSTRALIAN SUPERANNUATION INCOME STREAM TAX OFFSET IfyouarecompletingitemT4 andyourpayment summarydoesnotshowthetaxoffsetamount,follow thestepsbelowtocompletetheitem. Completing your tax return Step 1 ForeachPAYG payment summary superannuation income stream thatdoesnotshowataxoffset amount,youcanworkoutyourtaxoffsetamount bymultiplyingthetaxedelementandtheuntaxed elementofthetaxablecomponentshownoneach ofthosepaymentsummariesbytherelevant percentageshownintable 4 onthenextpage.
WORKSHEET 1 Working out the amount of your tax offset Theamountof yoursuperannuation incomestreambenefitpaid toyoubeforeyour55thor 60thbirthdayforwhichyou areentitledtoataxoffset Relevantpercentage fromtable 4 Multiply(a)by(b). Theamountofyour superannuationincome streambenefitpaidtoyou onorafteryour55thor60th birthdayforwhichyouare entitledtoataxoffset Relevantpercentage fromtable 4 $
CONTRIbUTIONS AND gIFTS TO REgISTERED POLITICAL PARTIES AND INDEPENDENT CANDIDATES AND MEMbERS Youcanclaimadeductionforcontributionsorgiftsto registeredpoliticalparties,independentmembersof parliament(stateorCommonwealth)orindependent candidatesinanelectionforparliament.Contributions mustbe$2ormore.Thecontributionorgiftmustbe ofmoneyorpropertythatyoupurchasedduringthe 12monthsbeforemakingthecontributionorgift.Ifit isproperty,theamountdeductibleisthemarketvalue ofthepropertyatthetimeofthedonationorthe amountyoupaidfortheproperty,whicheverisless.
Ifthetotalofallyourcontributionsandgiftstopolitical partiesduringtheyearisgreaterthan$1,500then themaximumamountyoucandeductin$1,500. Aseparatedeductionlimitof$1,500appliesifthe totalofallyourcontributionsandgiftstoindependent candidatesorindependentmembersofparliamentfor theyearexceeds$1,500. Youcannotclaimadeductionforapoliticalgiftor contributionof$2ormore(includingmembership fees)toregisteredpoliticalparties,independent candidatesandmembersofanAustralianlegislature ifyoumakethegiftorcontributioninthecourseof carryingonabusiness. Thecontributionmustbetoapoliticalpartythatis registeredunderCommonwealth,stateorterritory electorallaws. Thecontributiontoanindependentcandidateor independentmembersmustbetoacandidatefor electionto,ormemberof,theCommonwealth
(a) % (b) (c)
(d)
% (e)
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Multiply(d)by(e). Add(c)and(f). Addupthetaxoffset amountsyouhaveworked outatstep(g)foreach incomestream.
$ $
(f) (g)
(h)
TAbLE 4 Percentages used to work out your Australian superannuation income stream tax offset Income stream Deathbenefit Age of the deceased Under60yearsold Your age at date of each payment Under60yearsold 60yearsold andolder 60yearsold andolder Disability superannuation benefit Allother income streams Notapplicable Anyage Under60yearsold 60yearsold andolder Notapplicable Under55yearsold Taxed element 15% Notapplicable* Notapplicable* 15% Notapplicable* 0% Untaxed element 0% 10% 10% 0% 10% 0%
5559yearsold 60yearsold andolder
15% Notapplicable*
0% 10%
*Thetaxoffsetdoesnotapplybecausethisisnon-assessablenon-exemptincome,thatis,tax-freeincome.
Step 2 Ifyoudidnotturn55or60yearsoldduring200910, gotostep3. Ifyouturned55or60yearsoldduringthe200910 incomeyear,adifferentpercentageoftaxoffsetmay applytothesuperannuationincomestreamyouwere receivingbeforeandafteryourbirthday. Youcanaskyourpayerwhatamountsofyour superannuationincomestreamattractataxoffset, oryoucanuseworksheet 1 onthepreviouspage toworkouttheamountofyourtaxoffset.
Usesteps(a)to(g)inworksheet 1 toworkout theamountofyourtaxoffsetforeachelement ofthesuperannuationincomestreamyoureceived. Ifyoureceivedmorethanonesuperannuation incomestream,repeatsteps(a)to(g)foreach ofthoseincomestreams.
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Step 3 IfyouhaveanyPAYG payment summary superannuation income stream thatshowstaxoffset amounts,adduptheseamountsandtheamount from(h)inworksheet 1 onpages1212.Writethe totalamountatS itemT4 onyourtaxreturn.Donot showcents.
nApaymentofcompensationundersection68,
71or75oftheMilitary Rehabilitation and Compensation Act 2004 nApaymentofcompensationmentionedin paragraph234(1)(b)oftheMilitary Rehabilitation and Compensation Act 2004 Ifyouarenotsurewhetheragovernmentpension orbenefityouhavereceivedisatax-freegovernment pensionorbenefitforthepurposeofthisquestion, gotoourwebsiteatwww.ato.gov.au andsearch forIncometestsorphonetheIndividualInfoline.
TAX-FREE gOVERNMENT PENSIONS OR bENEFITS THAT ARE TAKEN INTO ACCOUNT IN THE INCOME TESTS Ifyoureceiveanyofthegovernmentpensionsor benefitslistedbelow,thenyoumustincludeat IT3 thepartofthosepensionsandbenefitsthatare exemptfromtax.Insomecases,allofyourpension orbenefitcouldbeexemptfromtax,andinother casesonlypartofitmightbe.
Donotincludeanypartofthesepensionsand benefitsthatisabereavementpayment, pharmaceuticalallowance,rentassistanceorremote areaallowance,orlanguage,literacyandnumeracy supplement. nDisabilitysupportpensionpaidbyCentrelinkto apersonwhoisunderage-pensionage nWifepensionwhereboththerecipientandtheir partnerareunderage-pensionageortherecipient isundertheage-pensionageandtheirpartner hasdied. nCarerpaymentunderPart2.5oftheSocial Security Act 1991 nPensionfordefence,peacekeepingorwar-caused deathorincapacity nInvalidityservicepensionwheretheveteranisunder age-pensionage nPartnerservicepensionwhereeither: thepartnerandtheveteranareunderthe age-pensionageandtheveteranisreceiving aninvalidityservicepension,or thepartnerisunderage-pensionage,theveteran hasdiedandwasreceivinganinvalidityservice pensionatthetimeofdeath nIncomesupportsupplementpaidunderPartIIIAof theVeterans Entitlements Act 1986 nDefenceForceincomesupportallowancepayable toyouonadaywhenthewholeofyoursocial securitypensionorbenefit,whichisalsopayable toyouonthatday,isexemptfromincometax undersection52-10oftheIncome Tax Assessment Act 1997 nAspecialratedisabilitypensionunderPart6of chapter4oftheMilitary Rehabilitation and Compensation Act 2004
gLOSSARY Spouse Yourspouseincludesanotherperson(whether ofthesamesexoroppositesex)who: n youwereinarelationshipwiththatwasregistered underaprescribedstateorterritorylaw, n althoughnotlegallymarriedtoyou,livedwithyou onagenuinedomesticbasisinarelationshipas acouple.

Childincludes: n youradoptedchild,stepchildorex-nuptialchild nachildofyourspouse,and nsomeonewhoisyourchildwithinthemeaningof theFamily Law Act 1975(forexample,achildwho isconsideredtobeachildofapersonunderastate orterritorycourtordergivingeffecttoasurrogacy agreement). Thefollowingdefinitionsareforkeytermsin questions4and8.
Foreign termination payment (FTP) Ifyouthinkyoureceivedaforeigntermination payment(discussedatquestion4),thefollowing descriptionwillhelpyoudecidewhattodo.

AnFTPisapaymentthat: nyoureceivedinconsequenceofthetermination ofyouremploymentinaforeigncountryandthe paymentrelatesonlytoaperiodofemployment whenyouwereaforeignresident,or nwasnotexemptfromincometaxintheforeign country,youwereanAustralianresidentduring theperiodoftheemploymentorservice,andyou receivedthepaymentasaresultofthetermination ofyour employmentinaforeigncountrywheretheforeign earningswereexemptfromAustraliantaxforthe periodofemployment,or qualifyingserviceonanapprovedprojectand theeligibleforeignremunerationwasexempt fromAustraliantaxduringtheperiodofservice.
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TAXPACK 2010
ThepaymentisnotanFTPifitisasuperannuation benefitpaidfromasuperannuationfund,retirement savingsaccountoranapproveddepositfundorifit isapaymentofapensionoranannuity. Foreignterminationpaymentsarenon-assessable non-exemptincome,thatis,tax-freeincome.Donot showthemanywhereonyourtaxreturn.
Thesepaymentsarenon-assessablenon-exempt income,thatis,tax-freeincome.Donotshowdirected terminationpaymentsanywhereonyourtaxreturn.
Late termination payment Alateterminationpaymentisalumpsumpayment similartoemploymentterminationpayments(ETPs) referredtoinquestion4whichyoureceivedmore than12monthsafterthetimeyouretiredorceased employment.

AlateterminationpaymentistreatedasanETPwhere: n legalactionaboutyourentitlementtotheETPor abouttheamountoftheETPwascommenced within12monthsoftheterminationofyour employment,or n thepaymentwasmadebyapersonwhowas appointedwithin12monthsofyouremployment terminationasaliquidator,receiverortrusteein bankruptcyfortheemployer. Iftheseconditionsarenotmet,andyoureceivedthe paymentmorethan12monthsafterterminationof youremployment,thenyoumustshowtheamount ofthepaymentatitem1onyourtaxreturn.
Death benefit employment termination payment (ETP) AdeathbenefitETPisalumpsumpaymentwhich ispaidtoyoubecauseyouarethebeneficiaryofa personwhohasdied.IftheETPwaspaidtoyouas thetrusteeofadeceasedestate,youmustshowthe ETPonthetaxreturnofthedeceasedestate,noton yourpersonaltaxreturn.
IfyoureceivedadeathbenefitETPfromadeceased personsemployer,theinformationprovidedonyour PAYG payment summary employment termination paymentwilldependonwhetheryouwereadeath benefits dependant (seethedefinitionbelow). Ifyouwereadeathbenefitsdependant,thepayment summarywillshowonlythetaxablecomponents oftheETPover$150,000.Ifyouwerenotadeath benefitsdependant,thepaymentsummarywill showtheentiretaxablecomponentoftheETP.
Transitional termination payment Atransitionalterminationpaymentisapaymentto whichtransitionalarrangementsapply.Transitional arrangementsapplytoanETP: n madetoyouonorafter1July2007,and n towhichyouwereentitledon9May2006under awrittencontract anAustralianorforeignlaw(oraninstrument undersuchalaw),or aworkplaceagreementundertheWorkplace Relations Act 1996.
Thecontract,laworagreementshouldspecifythe amountofthepaymentorawaytoworkoutthe specificamountofthepayment. Formoreinformation,seetheelectronicpublication Employment termination payments transitional arrangements availableonourwebsite.
Death benefits dependant Youareadeathbenefitsdependantofthedeceased if,atthetimetheydied,youwere: n thesurvivingspouse n aformerspouse n achildofthedeceasedandyouwereunder 18yearsold n anyotherpersonwhowasfinanciallydependent onthedeceased,or n anyotherpersoninaninterdependency relationship withthedeceased(seethe definitiononthenextpage).
Forquestion 8,youarealsoadeathbenefitsdependant whenyoureceiveasuperannuationlumpsumpayment becauseamemberoftheAustralianDefenceForceor ofanAustralianpoliceforce,includingtheAustralian ProtectiveService,diedinthelineofduty. Ifyoudisagreewiththedependencystatusshown onyourpaymentsummary,youshoulddiscussitwith thepayer. Forthepurposesofthedefinitionofdeathbenefits dependantthefollowingapply: n Spouseofthedeceasedincludesanotherperson (whetherofthesameoroppositesex): withwhomthedeceasedwasinarelationship thatwasregisteredunderaprescribedlawof astateorterritory notlegallymarriedtothedeceasedperson,who livedwiththedeceasedonagenuinedomestic basisinarelationshipasacouple.
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Directed termination payment Atransitionalterminationpaymentcan,atyour request,bepaidbyyouremployertoacomplying superannuationfundortopurchaseasuperannuation annuity.Thesepaymentsarecalleddirected terminationpayments.
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n Child
ofthedeceasedincludes: anadoptedchild,stepchildorex-nuptialchild ofthedeceased achildofthedeceasedsspouse someonewhoisachildofthedeceased withinthemeaningoftheFamily Law Act 1975 (forexample,achildwhoisconsideredtobea childofapersonunderastateorterritorycourt ordergivingeffecttoasurrogacyagreement).
Low-rate cap for taxable components of superannuation lump sum payments Thisconcessionappliesonlytosuperannuationlump sumspaidtoyouwhenyouare55to59yearsold, thatis,whenyouhavereachedyourpreservationage (55yearsold)butbeforeyouturn60yearsold.
Thelow-ratecapisthemaximumamountoftaxable components(taxedanduntaxedelements)thatcan betaxedataconcessionallowerrate. For200910,thelow-ratecapis$150,000,butit couldbelessforyouifbeforeJuly2009youreceived asuperannuationlumpsumafteryour55thbirthday. Thelow-ratecapisalifetimelimit.Thismeans thatthetaxed element anduntaxed elements ofall superannuationlumpsumpaymentsthat youreceivewhenyouare55to59yearsoldwillbe taxedataconcessionalrateuntiltheirtotalreaches thelow-ratecapamount.Paymentsyoureceivein excessofthelow-ratecapwillbetaxedatthetax rateshownintable 1 onpage118. Consequently,for200910themaximumamount forwhichyoucanbetaxedataconcessionalrateis $150,000lessanyamounttowhichtheconcessional taxratehaspreviouslybeenapplied.
Interdependency relationship Aninterdependencyrelationshipexistsifthereisa closepersonalrelationshipbetweentwopeoplewho livetogetherand: n oneorbothprovideforthefinancial,domestic andpersonalsupportoftheother,or n thereasontheydonotprovidefinancial,domestic andpersonalsupportisbecauseoneofthemsuffers fromaphysical,intellectualorpsychiatricdisability. Terminal medical condition Youhaveaterminalmedicalconditionifboththe followingcircumstancesaremet: n tworegisteredmedicalpractitioners(withatleast onebeingaspecialistpractisinginthearearelated totheillnessorinjury)havecertifiedthatyousuffer anillnessorhaveincurredaninjurythatislikely toresultinyourdeathwithina12-monthperiod n eachofthecertificatesislessthan12monthsold.
Superannuationlumpsumpaymentspaidtoyou aretaxfreeifyouhaveaterminal medical condition and,atthetimeofpayment,orwithin90days ofreceivingpayment,youhavetherequiredmedical certificatesstatingthatyouhaveaterminalmedical condition.YoushouldnothavereceivedaPAYG paymentsummaryforthesepayments. Ifyoureceivedsuchapaymentandtaxwaswithheld, youcangetarefundofthetax. Forinformationabouthowtogettherefundand forfurtherinformationaboutthesepayments, seeAccessing your super if you have a terminal medical condition (NAT72437)onourwebsiteat www.ato.gov.au
Untaxed-plan cap for untaxed elements Theuntaxed-plancapisthemaximumamountofthe untaxedelementsofyoursuperannuationlumpsum paymentswhichwillbesubjecttoconcessionaltaxrates.

For200910,theuntaxed-plancapis$1.1million. Thecapisindexed. Thereisaseparateuntaxed-plancapforeach superannuationfundyouhave.Thismeansthat, foreachfund,theuntaxedelementswhichmakeup yoursuperannuationpaymentswillbetaxedata concessionalrateuntiltheseuntaxedelementsreach theuntaxed-plancapamount($1.1millionplusfuture indexedincreases).Amountsabovethislimitare taxedatthetopmarginalrate. Ifyourolloveranamountfromonesuperannuation fundtoanother,anyuntaxedelementthatispartof thatamountwillcounttowardstheuntaxed-plancap forthefundfromwhichtheamountwasrolledover.
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Important information
OUR COMMITMENT TO YOU Wearecommittedtoprovidingyouwithaccurate, consistentandclearinformationtohelpyou understandyourrightsandentitlementsandmeet yourobligations.
Ifyoufollowourinformationinthispublicationandit turnsouttobeincorrect,oritismisleadingandyou makeamistakeasaresult,wemuststillapplythe lawcorrectly.Ifthatmeansyouoweusmoney,we mustaskyoutopayitbutwewillnotchargeyou apenalty.Also,ifyouactedreasonablyandingood faithwewillnotchargeyouinterest. Ifyoumakeanhonestmistakeintryingtofollowour informationinthispublicationandyouoweusmoney asaresult,wewillnotchargeyouapenalty.However, wewillaskyoutopaythemoney,andwemayalso chargeyouinterest. Ifcorrectingthemistakemeansweoweyoumoney, wewillpayittoyou.Wewillalsopayyouanyinterest youareentitledto. Ifyoufeelthatthispublicationdoesnotfullycover yourcircumstances,oryouareunsurehowitapplies toyou,youcanseekfurtherassistancefromus. Weregularlyreviseourpublicationstotakeaccount ofanychangestothelaw,somakesurethatyou havethelatestinformation.Ifyouareunsure,you cancheckforamorerecentversiononourwebsite atwww.ato.gov.auorcontactus. ThispublicationwascurrentatMay 2010.
LODgE YOUR TAX RETURN bY 31 OCTObER 2010 Youhaveuntil31October2010tolodgeyourtax return,unlesswehaveallowedyoutolodgeitlate, oryouhavealaterduedatewhenaregistered taxagentpreparesyourtaxreturn.
Ifyoucannotlodgeyourtaxreturnby31October2010 contactusassoonaspossible,andcertainlybefore 31October2010,tofindoutwhetheryoucanlodge atalaterdate. As31October2010isaSunday,youhaveuntil Monday,1Novembertolodgeyourtaxreturnwithout incurringafailuretolodgeontimepenalty.
Failure to lodge on time penalty Wemayapplyapenaltyforfailuretolodgeontime ifyourtaxreturnisnotlodgedbytheduedate.

Generally,weapplyapenaltyof$110forevery 28days(orpartthereof)thatyourtaxreturnis overdue,toamaximumof$550.Wemayapply thepenaltyevenwherethereisnotaxpayable. However,ourpolicyisnottoapplyapenaltywhere: nyoulodgeyourtaxreturnvoluntarily,and nnotaxispayable.
WHERE TO SEND YOUR TAX RETURN Within Australia Ifyoudecidetolodgeapapertaxreturn,youcanuse thepre-addressedenvelopeprovidedtosendittous, orsenditto: Australian Taxation Office GPO Box 9845 IN YOUR CAPITAL CITY
Do not replace the words IN YOUR CAPITAL CITY with the name of your capital city and its postcode they are not needed because of a special agreement with Australia Post.
WHO CAN COMPLETE YOUR TAX RETURN? Youcangetsomeoneelsetocompleteyourtax returnforyou. nAfamily member or friendcanhelpyoubutthey cannotchargeyouafee.Youmuststillsignitand youarestilllegallyresponsiblefortheaccuracyof theinformation. n Tax Help isafreeserviceprovidedbycommunity volunteerstrainedtohelppeopleonlowincomes preparetheirtaxreturns.
From overseas Youcanlodgeyourtaxreturnonlineusinge-taxgo towww.ato.gov.auformoreinformation.Mostrefunds areissuedwithin14daysandyouhavetheoptionto usethepre-fillingservicewhichdownloadsinformation reportedtotheTaxOfficedirectlytoyourtaxreturn.

Alternatively,youcanlodgeapapertaxreturnanduse thepre-addressedenvelopetosendittous.Changethe addressbycrossingoutIN YOUR CAPITAL CITY and replacewith SYDNEY NSW 2001, AUSTRALIA. Itwillassistusifyoucrossoutthebarcodeabove theaddress.
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TAXPACK 2010
Importantinformation
IF YOU MADE A MISTAKE OR NEED TO AMEND YOUR TAX RETURN Ifyourealisethatyoudidnotincludesomethingon yourtaxreturnthatyoushouldhave,oryoumade amistake,youneedtocorrectitassoonaspossible byrequestinganamendment.
Youcanrequestanamendmentbycompletingthe Request for amendment of income tax return for individualsform.ThisformisavailablefromtheATO websiteatwww.ato.gov.auunderFixaproblem, thenCorrectamistakeinyourtaxreturn. Alternatively,youcanwritealettertous.Intheletter provide: nyourname,address,phonenumberandtax filenumber ntheyearshownonthetaxreturnyouwantto amendforexample,2010 nthetaxreturnitemnumberanddescriptionaffected bythechange ntheamountofincomeordeductionstobeadded ortakenaway,ifrelevant ntheamountoftaxoffsetstobeincreasedor decreased,ifrelevant ntherelevantclaimtypecode,ifapplicabletothe itembeingchanged nanexplanationofwhyyoumadethemistake nanyadditionalinformation,ifapplicable,totheitem beingchanged,and nasignedanddateddeclarationIdeclarethatall theinformationIhavegiveninthisletter,including anyattachments,istrueandcorrect. Itisveryimportantthatyourletterexplainswhyyou madethemistakeorthereasonforthechange,sothat wecancorrectlyassessanypenaltyorinterestcharge. Postyourletterandattachmentsto: Australian Taxation Office GPO Box 3004 Penrith NSW 2740 Keepacopyforyourrecords. Donotsendanothertaxreturnunlessweaskyouto. If,afterlodgingyourtaxreturn,youvoluntarilytellus thatyoumadeamistakeandanamendmentwillresult inyoupayingmoretax,theamountofpenaltythatmay otherwisehavebeenimposedwill,inmostcases,be reduced.Inmostcasesyoumustlodgeyourrequest foranamendmentwithintwoyearsofthedatethe Commissionerissuedyournoticeofassessment.
YOUR RIgHT TO COMPLAIN Ifyouaredissatisfiedwithaparticulardecisionwe havemade,orwithoneofourservicesoractions, youhavetherighttocomplain.

Werecommendthatyoufirsttrytoresolvetheissue withthetaxofficeryouhavebeendealingwith,or phonethenumberyouhavebeengiven. Ifyouarenotsatisfied,talktothetaxofficersmanager. Ifyouarestillnotsatisfied,phoneourcomplaintsline on1800 199 010. Youcanalsomakeacomplaint:
nbywritingto:
Complaints Australian Taxation Office PO Box 1271 Albury NSW 2640 nonlineatwww.ato.gov.au nbysendingaFREEFAXon1800 060 063.
THE COMMONWEALTH OMbUDSMAN Ifyouarenotsatisfiedwithourdecisionsoractions, youcanraisethematterwiththeCommonwealth Ombudsman.

TheCommonwealthOmbudsmansoffice caninvestigatemostcomplaintsrelatingtotax administrationandmayrecommendthatweprovide asolutionorremedytoyourproblem.Investigations areindependent,private,informalandfreeofcharge. YoucancontacttheCommonwealthOmbudsmans officeby: nvisitingtheirwebsiteatwww.ombudsman.gov.au nphoning1300 362 072 nsendinganemailto ombudsman@ombudsman.gov.au or nwritingto: The Commonwealth Ombudsman GPO Box 442 Canberra ACT 2601
THE PRIVACY COMMISSIONER ThePrivacyCommissionerreceivescomplaintsunder thePrivacy Act 1988andthetaxfilenumberguidelines issuedundertheAct.YoucancontactthePrivacy Commissionerby: nvisitingtheirwebsiteatwww.privacy.gov.au nphoningtheprivacyhotlineon1300 363 992or nwritingto: The Privacy Commissioner GPO Box 5218 Sydney NSW 2001
TAXPACK 2010
127
Importantinformation
PRIVACY AND ACCESS TO INFORMATION Collecting your tax information WeareauthorisedbytheTaxation Administration Act 1953toaskforyourTFN.Itisnotanoffencenot toprovideyourTFN.However,yourassessmentmay bedelayedifyoudonotprovideyourTFN.
Weareauthorisedbythetaxlaws,includingthe Income Tax Assessment Act 1936,theIncome Tax Assessment Act 1997 andthe A New Tax System (Australian Business Number) Act 1999 toaskforthe otherinformationonthistaxreturn.Weneedthis informationtohelpustoadministerthetaxlaws.
Australian business Register TheCommissionerofTaxationistheRegistrarofthe ABR.Wemayuseinformationyouprovideonyour taxreturntoupdatetheABR.Forexamplewemay usetheinformationtoupdateyourtradingname, industryclassificationandmainbusinessaddress.

Tohelpbusinessandgovernmentinteractmoreeasily theRegistrarmaydiscloseinformationfromtheABR tootherCommonwealth,state,territoryandlocal governmentagencies. Youcanfinddetailsofthegovernmentagencies regularlyreceivinginformationfromtheABR ontheinternetatwww.abr.gov.auoryoucan phone13 28 66between8:00amand6:00pm MondaytoFridayandaskforalistofagenciesto beemailed,faxedorpostedtoyou. TheseagenciesmayuseABRinformationfor purposesauthorisedbytheirlegislationorforcarrying outtheirotherfunctions.Examplesofpossibleuses includeregistration,reporting,compliance,validation andupdatingofdatabases.
Who can we give your tax information to? Wecangiveyourtaxinformationtosomegovernment agenciesspecifiedinthetaxlaw,forexample: nbenefitpaymentagenciessuchasCentrelink, theDepartmentofEducation,Employmentand WorkplaceRelations,andtheDepartmentofFamilies, Housing,CommunityServicesandIndigenousAffairs nlawenforcementagenciessuchasstateand federalpolice notheragenciessuchastheChildSupportAgency (CSA)andtheAustralianBureauofStatistics.
Thisdisclosureisusuallytocheckeligibilityfor governmentbenefits,forlawenforcementpurposes orforcollectingstatistics.TheCSAmayusethe informationyougiveustoassessorcollectchild support.Ifyoureceivearefundchequewithyour noticeofassessment,wealsoprovidedetailsofyour refundtotheReserveBankofAustraliatoassistin clearingyourcheque.Informationyouprovideonyour taxreturnmayalsobeusedtoupdatetheAustralian BusinessRegister(ABR). Wecanalsodiscloseyourinformationinperforming ourdutiesunderthetaxlaw.Otherwisewecanonly giveyourinformationtoyouorsomeoneappointed toactforyou.
How do we protect your tax information? Thetaxlawscontainsecrecyprovisionsthatprohibit anyofficeroftheTaxOffice(includingemployeesand contractors)oranyothergovernmentagencyfrom improperlyaccessingordisclosinganyinformation youprovideonyourtaxreturn.Theseprovisionsonly allowofficerstodiscloseyourtaxinformationinthe performanceoftheirdutiesandincertainother specifiedcircumstances.
Inaddition,thePrivacy Act 1988protectspersonal informationheldbyfederalgovernmentagencies. ItalsoprotectsTFNs,nomatterwhoholdsthem.
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TAXPACK 2010
More information
PUbLICATIONS
To get publications, taxation rulings, practice statements and forms referred to in TaxPack 2010 you can: n visit our website www.ato.gov.au/publications n phone our Publications Distribution Service 1300 720 092 Before you phone, check whether there are other publications you might need this will save you time and help us. For each publication you order, quote the full title printed in TaxPack 2010. An automated self-help publications ordering service is available 24 hours a day, every day where you know the title of the publication. Alternatively, you can speak to an operator between 8.00am and 6.00pm Monday to Friday. n visit a Tax Office shopfront. For our shopfront addresses you can visit our website. Phone the Individual infoline for an appointment.
n
n n
capital gains, rental income, foreign income and other questions in TaxPack 2010 supplement notice of assessment your income tax account, such as personal details, payment arrangements and lost refund cheques, lodgment and queries about questions in TaxPack 2010 binding oral advice. 13 28 66 1800 199 010 1800 060 063
business Infoline Complaints Fax (FREECALL)
EFT Infoline 1800 802 308 For enquiries about direct deposit of your tax refund Family Assistance Office (FAO) Superannuation Infoline 13 61 50 13 10 20
YOU CAN VISIT OUR WEbSITE

You can visit our website at www.ato.gov.au for information on anything that you read in TaxPack 2010. You can use the tools and calculators on the website to help you complete your tax return.
Aboriginal and Torres Strait Islander Infoline 13 10 30 Specialises in helping Indigenous clients with their personal tax matters Tax Office personal self-help 13 28 65 Our automated phone service is available 24 hours a day, every day, so you can: n check the progress of your refund n find lost superannuation n make an arrangement to pay a tax debt n lodge your application for a refund of franking credits n lodge your application for a baby bonus n lodge your application for the education tax refund. Note: Although providing your TFN is voluntary, you need to quote your TFN to use these self-help services (except publications ordering). People with a hearing, speech or vision impairment If you are deaf or have a hearing or speech impairment, you can phone us through the National Relay Service (NRS). n TTY users, phone 13 36 77 and ask for the ATO number you need. If you need to contact an ATO 1800 free call number, phone 1800 555 677 and ask for the ATO number you need. n Speak and Listen (speech to speech relay) users, phone 1300 555 727 and ask for the ATO number you need. If you need to contact an ATO 1800 free call number, phone 1800 555 727 and ask for the ATO number you need. n Internet relay users, connect to the NRS (www.relayservice.com.au) and ask for the ATO number you need. For copies of TaxPack 2010 in accessible formats for the vision impaired, go to the outside back cover. To report tax evasion confidentially Phone (FREECALL) Fax (FREECALL) Go to our website Mail 1800 060 062 1800 804 544 www.ato.gov.au/reportevasion
INFOLINES
If you have an enquiry about your tax, phone the relevant infoline below. Make sure you have TaxPack 2010 handy when you phone us. We can offer a more personalised service if you provide your tax file number (TFN) and have your last notice of assessment with you when you phone us. If you require access to your Tax Office records you will be asked to prove your identity by providing your TFN and either details from your last notice of assessment or some personal details. Our infolines are open Monday to Friday 8.00am to 6.00pm except where otherwise indicated. Our automated services are available 24 hours a day, every day of the year. You can find a list of our infolines in your White Pages. Phoning from overseas If you are phoning us from overseas, phone +61 2 6216 1111 during our business hours, 8.30am to 4.45pm (Australian Eastern Standard or daylight-saving time) Monday to Friday. Note that our infoline numbers may not work from all countries. You can also fax us: +61 2 6216 2830 Individual Infoline 13 28 61 Phone between 8.00am and 6.00pm Monday to Friday. You can enquire about the following subjects from this service: n e-tax our free online tax preparation and lodgment software n pay as you go (PAYG), including instalment activity statements n student loan schemes (HELP and SFSS)
Locked Bag 6050, Dandenong VIC 3175
If you do not speak English well and need help from the Tax Office, phone the Translating and Interpreting Service (TIS) on 13 14 50. TIS staff can assist with interpreting in over 160 languages.
Tax Help
If you want to complete your own tax return or your claim for a refund of franking credits but think you may need some assistance, then Tax Help may be the answer. We train and support this network of community volunteers to help taxpayers. Tax Help is a free and confidential service for people on low incomes. To find out where your nearest Tax Help centre is, phone the Individual Infoline on 13 28 61.
TaxPack in accessible formats for the vision impaired

TaxDAISY
A disk containing TaxPack 2010 and TaxPack 2010 supplement in audio format for use in a DAISY player DAISY stands for Digital Accessible Information System and is a digital talking book that may contain sound and text. DAISY books can be read on a portable digital playback device or on a computer with DAISY software.
TaxCD
Audio summaries of TaxPack 2010 and TaxPack 2010 supplement on CD
TaxDisk
TaxPack 2010 and TaxPack 2010 supplement on disk formatted for computers with screen reader and speech synthesiser software All these are available free from the Tax Office phone 13 28 61.
E-tax 2010
Prepare your tax return on a computer, using screen reader software, and lodge online. You will need the internet and screen reader or screen magnification software. We recommend that you use a Microsoft operating system. Download e-tax from the Tax Office website at www.ato.gov.au

Tax Pack 2010

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Tax Pack 2010

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Instructions for taxpayers

Lodge online with e-tax its free.

Lodge your tax return by 31 October 2010.

Michael DAscenzo Commissioner of Taxation

WillyouneedTaxPack 2010 supplement? Whatsnewthisyear? CompletingIndividualinformationonyourtaxreturn

55 58 67 68 71 72 73 74 80 81 81 82 83 89 95 96 97 101 101 102 102 102 103 105 106

Will you need TaxPack 2010 supplement?

Whats new this year?

taxation of financial aRRangements (tofa) Newtaxationoffinancialarrangements(TOFA)rules havebeenintroducedtomodernisethetaxtreatment offinancialarrangements.

Completing Individual information on your tax return

COMPLETINg YOUR TAX RETURN Forthepurposesofsteps1to5paymentsummary includescomparablestatementsandstatutory declarations.Donotcombineamountsfromdifferent paymentsummaries(unlessinstructedatsteps5 and6).

Allowances, earnings, tips, directors fees etc

Did you receive any of the above payments?

ANSWERINg THIS QUESTION Youwillneedyourpaymentsummariesor comparablestatements(ordetailsofthepayments thatyoureceivediftheyarenotshownonapayment summaryorcomparablestatement).

COMPLETINg YOUR TAX RETURN Step 1 Addupanytaxwithheldfromthesepayments.

Employer lump sum payments

Thisquestionisaboutanylumpsumpaymentsyou receivedfromyouremployerforunusedannualleave orunusedlongserviceleave.

Did you receive any of these payments?

MORE INFORMATION Formoreinformation,gotoourwebsiteat www.ato.gov.auandenterLumpsumpayments intheSearchforboxatthetopofthepage.

Employment termination payments (ETPs)

Did you receive an ETP?

ANSWERINg THIS QUESTION YouwillneedyourPAYG payment summary employment termination payment.

COMPLETINg YOUR TAX RETURN IfyoureceivedtwoormoreETPs,gotostep5. Otherwise,readon.

Australian Government allowances and payments

Did you receive any of these payments?

Step 2 Adduptheincomeshownoneachofyourpayment summariesandletters. WritethetotalatAitem5. HELPFUL HINT Ifyouprepareyourtaxreturnonlineusinge-tax, youcanusethepre-fillingservicetodownload thesepaymentsdirectlytoyourtaxreturn.

COMPLETINg YOUR TAX RETURN Step 1 Addupthetaxwithheldshownoneachofyour paymentsummariesandletters.

Australian Government pensions and allowances

Did you receive any of these payments?

TAX TIPS Youmaybeentitledtoataxoffsetonthisincome. MakesureyouworkthroughquestionsT2 Senior AustraliansandT3 Pensionertoseewhether youareentitledtoataxoffset.

HELPFUL HINTS Ifyouprepareyourtaxreturnonlineusinge-tax, youcanusethepre-fillingservicetodownload thesepaymentsdirectlytoyourtaxreturn.

COMPLETINg YOUR TAX RETURN Step 1 Addupthetaxwithheldshownoneachofyour paymentsummariesandletters.

Australian annuities and superannuation income streams

Did you receive any of these payments?

LUMP SUMS IN ARREARS TAX OFFSET Youmaybeentitledtoataxoffsetifyoureceiveda superannuationincomestreamlumpsuminarrears. However,youneedtoprovideadditionalinformation.

(a) (b) (c)

Transfertheamountat(c)toNitem7. Ifyoudidnotreceiveanysuperannuationincome streamlumpsumsinarrears,gotoquestion8.

Australian superannuation lump sum payments

Did you receive any of these payments?

ANSWERINg THIS QUESTION YouwillneedyourPAYG payment summary superannuation lump sum.

 Gotostep4.  PrintNintheTYPEboxatitem8 onyourtaxreturn.Readbelow.

COMPLETINg YOUR TAX RETURN Ifyoureceivedmorethanonesuperannuationlump sumduringtheyear,gotostep5.Otherwise,readon.

Step 4 Thetaxedelementanduntaxedelementofyour superannuationlumpsumareonyourpayment summary. WritethetaxedelementamountatQitem8. WritetheuntaxedelementamountatPitem8. Youhavenowfinishedthisquestion.Gotoquestion9.

Step 7 Attachyourscheduletopage3ofyourtaxreturn andprintXintheYESboxatTaxpayers declaration question2aonpage12ofyourtaxreturn.

MORE INFORMATION FormoreinformationaboutAustraliansuperannuation lumpsums,gotoourwebsiteatwww.ato.gov.au andenterHowyoursuperpayoutistaxed or Understandingadeathbenefitpaidfromasuper fundintheSearchforboxatthetopofthepage.

Attributed personal services income

Did you receive any attributed personal services income?

TAX TIPS Ifthepersonalservicesentityhasanetloss relatingtoyourpersonalservicesincome,no amountisattributedtoyou.However,youshould readquestionD16inTaxPack 2010 supplement toclaimadeductionfortheloss.

COMPLETINg YOUR TAX RETURN Step 1 Writethetotalamountoftaxwithheldfromthe personalservicesincomeattributedtoyouunder Tax withheldattheleftofOitem9.

Total tax withheld

COMPLETINg YOUR TAX RETURN Step 1 AddupalltheamountsintheTax withheldcolumn atitems1to9onpage2ofyourtaxreturn.

Ifyouhadanyjointaccounts,showonlyyourshare oftheinterest.Thiswillbehalfifyouheldtheaccount equallywithoneotherperson.Keeparecordofhow youworkedoutyourproportionifyouandtheother accountholdersdidnotsharetheamountsof interestequally.

COMPLETINg YOUR TAX RETURN Step 1 Adduptheamountsofgrossinterestyoureceived in200910.

Donotincludedividendspaidunderademerger unlessthecompanyadvisedyoutoincludethem. Ifyoureceived,orwerecreditedwith,adividend whenyouwerenotanAustralianresident,see page117.

Were you paid or credited with any dividends by Australian companies?

ANSWERINg THIS QUESTION YouwillneedyourstatementsfromeachAustralian company,corporatelimitedpartnership,corporate unittrust,publictradingtrustandlistedinvestment companythatpaidyoudividendsormadedistributions toyoubetween1July2009and30June2010.

Ifyouhadanysharesinjointnames,showonlyyour proportionofthedividends.Thiswouldbehalfifyou heldthesharesequallywithoneotherperson.Keep arecordofhowyouworkedoutyourproportionif youandtheotherjointownersdidnotownthe sharesequally.

COMPLETINg YOUR TAX RETURN Ifanyofyourstatementsdonotshowfrankedand unfrankedportionsofthedividend,includethetotal dividendamountatTitem11whenyoucomplete step2.

MORE INFORMATION Formoreinformationaboutshares,dividendsand amountstreatedasdividends,seeYou and your shares 2010(NAT2632).

Employee share schemes

nataxedupfrontschemeeligibleforreduction nataxedupfrontschemenoteligibleforreduction ndeferralschemes,or napre-1July2009schemeandacessationtime

COMPLETINg YOUR TAX RETURN Forthepurposesofsteps1to3,employee summaryincludescomparablestatementsand statutorydeclarations.

YouneedtouseTaxPack 2010 supplementifyouhad anyofthefollowingtypesofincomeorlosses.

WillyouneedTaxPack 2010 supplement? Whatsnewthisyear? CompletingIndividualinformationonyourtaxreturn

taxation of financial aRRangements (tofa) Newtaxationoffinancialarrangements(TOFA)rules havebeenintroducedtomodernisethetaxtreatment offinancialarrangements.

COMPLETINg YOUR TAX RETURN Forthepurposesofsteps1to5paymentsummary includescomparablestatementsandstatutory declarations.Donotcombineamountsfromdifferent paymentsummaries(unlessinstructedatsteps5 and6).

ANSWERINg THIS QUESTION Youwillneedyourpaymentsummariesor comparablestatements(ordetailsofthepayments thatyoureceivediftheyarenotshownonapayment summaryorcomparablestatement).

COMPLETINg YOUR TAX RETURN Step 1 Addupanytaxwithheldfromthesepayments.

Thisquestionisaboutanylumpsumpaymentsyou receivedfromyouremployerforunusedannualleave orunusedlongserviceleave.

MORE INFORMATION Formoreinformation,gotoourwebsiteat www.ato.gov.auandenterLumpsumpayments intheSearchforboxatthetopofthepage.

ANSWERINg THIS QUESTION YouwillneedyourPAYG payment summary employment termination payment.

COMPLETINg YOUR TAX RETURN IfyoureceivedtwoormoreETPs,gotostep5. Otherwise,readon.

Step 2 Adduptheincomeshownoneachofyourpayment summariesandletters. WritethetotalatAitem5. HELPFUL HINT Ifyouprepareyourtaxreturnonlineusinge-tax, youcanusethepre-fillingservicetodownload thesepaymentsdirectlytoyourtaxreturn.

COMPLETINg YOUR TAX RETURN Step 1 Addupthetaxwithheldshownoneachofyour paymentsummariesandletters.

TAX TIPS Youmaybeentitledtoataxoffsetonthisincome. MakesureyouworkthroughquestionsT2 Senior AustraliansandT3 Pensionertoseewhether youareentitledtoataxoffset.

HELPFUL HINTS Ifyouprepareyourtaxreturnonlineusinge-tax, youcanusethepre-fillingservicetodownload thesepaymentsdirectlytoyourtaxreturn.

COMPLETINg YOUR TAX RETURN Step 1 Addupthetaxwithheldshownoneachofyour paymentsummariesandletters.

LUMP SUMS IN ARREARS TAX OFFSET Youmaybeentitledtoataxoffsetifyoureceiveda superannuationincomestreamlumpsuminarrears. However,youneedtoprovideadditionalinformation.

(a) (b) (c)

Transfertheamountat(c)toNitem7. Ifyoudidnotreceiveanysuperannuationincome streamlumpsumsinarrears,gotoquestion8.

ANSWERINg THIS QUESTION YouwillneedyourPAYG payment summary superannuation lump sum.

Gotostep4. PrintNintheTYPEboxatitem8 onyourtaxreturn.Readbelow.

COMPLETINg YOUR TAX RETURN Ifyoureceivedmorethanonesuperannuationlump sumduringtheyear,gotostep5.Otherwise,readon.

Step 4 Thetaxedelementanduntaxedelementofyour superannuationlumpsumareonyourpayment summary. WritethetaxedelementamountatQitem8. WritetheuntaxedelementamountatPitem8. Youhavenowfinishedthisquestion.Gotoquestion9.

Step 7 Attachyourscheduletopage3ofyourtaxreturn andprintXintheYESboxatTaxpayers declaration question2aonpage12ofyourtaxreturn.

MORE INFORMATION FormoreinformationaboutAustraliansuperannuation lumpsums,gotoourwebsiteatwww.ato.gov.au andenterHowyoursuperpayoutistaxed or Understandingadeathbenefitpaidfromasuper fundintheSearchforboxatthetopofthepage.

TAX TIPS Ifthepersonalservicesentityhasanetloss relatingtoyourpersonalservicesincome,no amountisattributedtoyou.However,youshould readquestionD16inTaxPack 2010 supplement toclaimadeductionfortheloss.

COMPLETINg YOUR TAX RETURN Step 1 Writethetotalamountoftaxwithheldfromthe personalservicesincomeattributedtoyouunder Tax withheldattheleftofOitem9.

COMPLETINg YOUR TAX RETURN Step 1 AddupalltheamountsintheTax withheldcolumn atitems1to9onpage2ofyourtaxreturn.

Ifyouhadanyjointaccounts,showonlyyourshare oftheinterest.Thiswillbehalfifyouheldtheaccount equallywithoneotherperson.Keeparecordofhow youworkedoutyourproportionifyouandtheother accountholdersdidnotsharetheamountsof interestequally.

COMPLETINg YOUR TAX RETURN Step 1 Adduptheamountsofgrossinterestyoureceived in200910.

Donotincludedividendspaidunderademerger unlessthecompanyadvisedyoutoincludethem. Ifyoureceived,orwerecreditedwith,adividend whenyouwerenotanAustralianresident,see page117.

ANSWERINg THIS QUESTION YouwillneedyourstatementsfromeachAustralian company,corporatelimitedpartnership,corporate unittrust,publictradingtrustandlistedinvestment companythatpaidyoudividendsormadedistributions toyoubetween1July2009and30June2010.

Ifyouhadanysharesinjointnames,showonlyyour proportionofthedividends.Thiswouldbehalfifyou heldthesharesequallywithoneotherperson.Keep arecordofhowyouworkedoutyourproportionif youandtheotherjointownersdidnotownthe sharesequally.

COMPLETINg YOUR TAX RETURN Ifanyofyourstatementsdonotshowfrankedand unfrankedportionsofthedividend,includethetotal dividendamountatTitem11whenyoucomplete step2.

MORE INFORMATION Formoreinformationaboutshares,dividendsand amountstreatedasdividends,seeYou and your shares 2010(NAT2632).

nataxedupfrontschemeeligibleforreduction nataxedupfrontschemenoteligibleforreduction ndeferralschemes,or napre-1July2009schemeandacessationtime

COMPLETINg YOUR TAX RETURN Forthepurposesofsteps1to3,employee summaryincludescomparablestatementsand statutorydeclarations.

YouneedtouseTaxPack 2010 supplementifyouhad anyofthefollowingtypesofincomeorlosses.

ANSWERINg THIS QUESTION Youmayneed: nwrittenevidenceforyourcarexpensesreceipts, invoicesordiaryentries nyourcarlogbookandodometerrecords.

Deductions for decline in value (depreciation) Youcanclaimadeductionforthedeclineinvalue ofthecaronlyifyouowneditorhireditundera hire-purchaseagreementandyoumustuseeitherthe one-thirdofactualexpensesorthelogbookmethod.

Example Joannehada2-litreordinaryenginecarwhichshe usedtotravel300kminperformingherjobduring 200910.Sheclaimsadeductionof$222.

ANSWERINg THIS QUESTION Youmusthavewrittenevidenceforthewholeof yourclaim.

TAX TIPS Makesureyoukeepaccuraterecordsoftravelto makefutureclaims.

COMPLETINg YOUR TAX RETURN Step 1 Addupallyourdeductibletravelexpenses.

ANSWERINg THIS QUESTION Youwillneed: nreceipts,invoicesorotherwrittenevidence,and nanydiaryrecordsofyourlaundrycosts,ifyouneed writtenevidenceformoreinformationonwritten evidenceseeourwebsiteatwww.ato.gov.au

COMPLETINg YOUR TAX RETURN Step 1 Addupallyourdeductiblework-relatedclothing, laundryanddry-cleaningexpenses.

ANSWERINg THIS QUESTION Tocompletethisitemyouwillneedwrittenevidence. Moreinformationonwhatiswrittenevidenceis availableonourwebsiteatwww.ato.gov.au

Youcanusetheself-educationexpensescalculatorat www.ato.gov.au/calculatorstoworkoutyourclaim, thengotostep4underCompleting your tax return onpage38.Otherwise,followtheinstructionsonthe nextpage.

COMPLETINg YOUR TAX RETURN Tocompletethisitem,youmustaddupyour self-educationexpensesunderthefollowing categoriesbecause,inworkingoutwhatyou canclaim,certaincostsarereducedby$250.

Usetheamountsyouhavewrittenintheworksheet abovetocompletethestepsthatfollow. Step 1 IfyouhadanycategoryAexpenses,gotostep2. Otherwise,readon. AddB,CandD. $ (f)

Transfertheamountat(f)toDitemD4.Gotostep4. Step 2 AddC,DandE. $ (g)

Iftheamountat(g)islessthan$250,gotostep3. Otherwise,readon. AddA,B,CandD. $ (h)

Tomakeworkingoutyourdeductionseasier nextyear,startkeepingyourrecordsnow.More informationaboutrecordkeepingisavailableon ourwebsiteatwww.ato.gov.au

Ifyourtotalclaimforallwork-relatedexpenses exceeds$300,youmusthavewrittenevidence.More informationonwhatiswrittenevidenceisavailableon ourwebsiteatwww.ato.gov.au

COMPLETINg YOUR TAX RETURN Step 1 Addupalltheexpensesthatyoucanclaimat thisitem.

youincurthisincomeyearforassetsyouallocatedto thepoolinanearlierincomeyearandforlow-value assetsyouallocatetothepoolthisincomeyear.

Readexample 1,thenuseworksheet 1toworkout yourdeduction.

Edwardpreviouslyclaimeddeductionsunderthe diminishingvaluemethodforalaptopcomputerhehad purchasedfor$1,500.Hisemployerdidnotpayor reimburseanyofthecostofthecomputer.Thelaptops openingadjustablevalueon1July2009was$900.

Edwardestimatesthathewilluseitsolelytoproduce hisassessableincomeforitsremainingeffectivelife. Edwardallocatesthelaptoptothepoolin200910 asitisnowalow-valueasset.

(b) (c) (d)

(f) (g) (h) (i)

COMPLETINg YOUR TAX RETURN Step 1 Usingworksheet 1,workoutyourtotallow-value pooldeduction.Transfertheamountyouworkedout at(i)toKitemD6.

MORE INFORMATION Formoreinformation,seeGuide to depreciating assets 2010(NAT1996).Thispublicationisavailable onourwebsite,orseetheinsidebackcovertofind outhowtoobtainaprintedcopy.

You $ $ $ $ $ $ $ (j) (k) (l) (m) (n) (o) (p)

Foreachpoolassetsubjecttoabalancingadjustmenteventin200910, multiplyitsterminationvaluebyyourtaxableusepercentageforthe asset(seestep2above).Adduptheamountsandwritethetotalat(q). $0 Take(q)awayfrom(p).Thisisyourclosingpoolbalancefor200910. $758

ANSWERINg THIS QUESTION Youwillneed: nyourbankorfinancialinstitutionstatementsor passbooks.

COMPLETINg YOUR TAX RETURN Step 1 Addupallyourdeductionsforthisitem.

MORE INFORMATION Formoreinformation,see: nGuide to depreciating assets 2010(NAT1996) ifyouareclaimingadeductionforthedeclinein valueofyourcomputer.

COMPLETINg YOUR TAX RETURN Step 1 Addupallyourdeductionsforthisitem.

nforcultural,environmentalandheritagepropertygifts nforculturalbequests nwhenenteringintoconservationcovenants nifyouchoosetospreadoverfiveyearsyour

COMPLETINg YOUR TAX RETURN Step 1 Adduptheamountsofallgiftsanddonationsyou areentitledtoclaim.

COMPLETINg YOUR TAX RETURN Step 1 Addupthecostsofmanagingyourtaxaffairs.

GotoTotal deductions. Readbelow.

COMPLETINg YOUR TAX RETURN GotoTOTAL DEDUCTIONSonpage4ofyour taxreturn.