Taxation

The dollar thresholds listed in this section were correct at April 2012. To check whether any thresholds have changed, please visit the Australian Taxation Office’s (ATO) website or call the number below.

Answers on how to lodge your tax return

If you need to lodge a tax return, the ATO has a number of lodgement options available to help you lodge it on time. One of the easiest ways is to lodge it online, using the electronic lodgement ‘e-tax’ service which you can access free of charge from the ATO website.

You might like to consider the ATO’s Tax Help program. Tax Help is a free community service run by ATO-trained volunteers and provides help to people who are low-income earners and have simple tax affairs. Call the ATO to see if you are eligible to use this service and to find your nearest Tax Help centre.

Phone: 13 28 61 (ATO Individual Infoline)
13 36 77 (TTY)

Website: Australian Taxation Office at www.ato.gov.au/individuals

Flood levy

The Australian government introduced a Temporary Flood and Cyclone Reconstruction Levy (‘flood levy’) applying to taxable income for the 2011–12 year only.

It is designed to help affected communities to recover from the recent natural disasters by providing additional funding to rebuild essential infrastructure such as roads, bridges and schools.

The flood levy only applies to taxable income derived between 1 July 2011 and 30 June 2012.

Depending on your circumstances, you may be exempt from the flood levy. More information is available on the ATO website.

Phone: 13 28 61 (ATO Individual Infoline)
13 36 77 (TTY)

Website: Australian Taxation Office at www.ato.gov.au/floodlevy

Medicare Levy

Most Australians are liable to pay the Medicare levy. The standard Medicare levy is currently 1.5 per cent of your taxable income. However, this may vary according to your circumstances. Your taxable income is usually the amount you wrote in the taxable income or loss section on your tax return.

We will work out your Medicare levy—including any Medicare levy reduction—from the information you provide on your tax return.

If you want to work out your Medicare levy, you can use the Medicare levy calculator, available on the ATO website.

Medicare levy surcharge (MLS) is a levy that applies if you or your dependants did not have an appropriate level of private patient hospital cover for the whole of the income year, and your income is above the surcharge threshold. From 1 July 2012 the MLS has been income tested against three new income tier thresholds. The rules for how the MLS applies have not changed.

Phone: 13 28 61 (ATO Individual Infoline)
13 36 77 (TTY)

Website: Australian Taxation Office at www.ato.gov.au/individuals

Private health insurance rebate

The government has introduced changes to the private health insurance rebate. From 1 July 2012, the private health insurance rebate has been income tested against three new income tier thresholds. The methods for claiming your private health insurance rebate have not changed. You can claim your rebate as a:

premium reduction to your policy price with your insurer
refundable tax offset through your income tax return
direct rebate refund from Medicare.

Visit the Australian Taxation Office website for details of the current thresholds.

Phone: 13 28 61 (ATO Individual Infoline)
13 36 77 (TTY)

Website: Australian Taxation Office at www.ato.gov.au/individuals
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Tax File Number

A Tax File Number (TFN) is a unique nine-digit number the Australian Taxation Office (ATO) issues to individuals and organisations to help administer tax and other Australian Government systems. Your TFN is used to identify you in your dealings with the ATO and will usually stay the same for life. It’s an important part of your identity and should be kept safe.

Never quote or give out your TFN unless there is a good reason, such as completing a tax form or opening a bank account.

Only certain people are entitled to ask for your TFN including the ATO, the Department of Human Services, your superannuation fund, bank or financial institution and your employer (but only after you have started working for them).

Your TFN should never be used to establish or confirm your identity with other organisations.

If you change your name or address, you should advise the ATO so they can update your details.

You can apply for a TFN by going to the ATO website or calling the ATO for an application form. Alternatively you can apply through the Department of Human Services or the Department of Veterans’ Affairs when applying for certain benefits.

Phone: 13 28 61 (ATO Individual Infoline)
13 36 77 (TTY)

Website: Australian Taxation Office at www.ato.gov.au/individuals

Tax offsets

Tax offsets (sometimes also referred to as rebates) directly reduce the amount of tax you must pay. They are not the same as tax deductions. Deductions only reduce your total assessable income dollar-for-dollar and your tax payable by (at most) your marginal tax rate. Each dollar of tax offset reduces your tax payable by a dollar, regardless of your taxable income.

Senior Australians, pensioners or mature workers may be eligible for one or more of the following offsets.

Low income tax offset
You may be eligible for a tax offset if you are a low-income earner, such as when you only work part-time.

You do not have to claim this offset; the Australian Taxation Office will work it out for you when you lodge your tax return.

Mature age worker tax offset
The mature age worker offset aims to encourage and reward mature age workers who stay in the workforce. The maximum tax offset is currently $500.

To be eligible for the mature age worker tax offset you must:

be an Australian resident for tax purposes
be aged 55 years or over at the end of the financial year
have received net income from working (within certain limits).

The mature age worker offset can only reduce your tax liability to nil. Any unused portions cannot be refunded and cannot be transferred to another taxpayer. This offset should not be confused with the senior Australian tax offset or the pensioner tax offset. Some people may be eligible for more than one of these.

Medical expenses tax offset
You qualify for this if you have net qualifying medical expenses over the threshold. Net medical expenses are the medical expenses you have paid, less any refunds that you have received, or could receive, from the Department of Human Services or your private health fund.

The medical expenses tax offset is calculated as a percentage of the excess of net medical expenses over the threshold. The medical expenses must be for you or for your dependants, and you all must be Australian residents for tax purposes.

Check Australian Tax Office at www.ato.gov.au/individuals for further information, and refer to the net medical expenses tax offset calculator to work out whether you are eligible.

Senior and pensioner tax offset
The senior and pensioner tax offset (SAPTO) can reduce the amount of tax you are liable to pay. To be eligible, you must meet certain conditions regarding your age, income and eligibility for an Australian government pension.

Phone: 13 28 61 (ATO Individual Infoline)
13 36 77 (TTY)

Website: Australian Taxation Office at www.ato.gov.au/individuals

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