2010 Taxation System Changes
by Arthur Kassos, CPA
This year promises to be one of big changes with the Henry Review of the Taxation System. Most are waiting anxiously to see what the review of the taxation system will mean to them.
An important change that will affect ordinary wage and salary earners with few or no deductions is the proposed scrapping of the necessity to lodge an I return. Instead the ATO may refund everyone a minimum amount which after all the administrative savings will probably seem a pittance to what most people claim and get back. You will be able to lodge a return if you want. It will probably be April before we have a good idea of what to expect.
The ATO is determined to catch tax cheats and is sending out a letter to clients who are in the cash economy. You can expect a letter if you meet one of the following criteria:
1.make substantial bank deposits that do not appear to be consistent with reported income; or
2.make multiple international bank transfers out of your bank accounts that don't appear to be consistent with your reported income; or
3.reported income that doesn't appear to support the owner's personal living expenses.
The ATO has its own models to help it identify taxpayers that constantly report low income and yet their income is inconsistent with their lifestyle.
With current bad economic times for a lot of businesses employees are trying to cut costs as best as they can. One way, says the ATO, is by treating employers as contractors and not employees and therefore enjoying substantial savings on payroll tax, workcover and superannuation guarantee while taking advantage of their workers by denying them of their economic dues.
Frequent Flyer Points when you pay your taxMAYBE. The tax office is trialling the payment of all taxation liabilities by credit cards namely MASTERCARD, VISA or AMERICAN EXPRESS. There will be a card payment fee due if using a credit card. During the trials payments of between $10 and $10,000 will be accepted.