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Firstly, you need to know your total income for the financial year 2002-2003.This includes:

• Earnings from employer/s. You should receive a group certificate or payment summary at the end of the financial year, stating the income you earned during that year.
• Interest earned from bank accounts. Some banks provide end-of-financial year statements showing interest earned; otherwise, total the interest shown on your bank statements for the past year.
• Income from investments. This includes capital gain from sale of shares, and any interest or dividends earned from other investments.

Secondly, consider whether you have incurred expenses that qualify as tax deductions*, for example:

• Work-related costs. Protective clothing, compulsory uniforms, study expenses directly related to your job, car expenses if the vehicle is used for work, some travel expenses, union fees, sunscreen, hats and sunglasses for outdoor workers, professional association fees, subscriptions to trade magazines or journals, stationery, computer disks, calculators and even brief-cases are all examples of work-related deductibles. It’s worth checking the Tax Office’s list of work-related deductibles to see what you can claim. Once the amount exceeds $300, you must be able to provide receipts.
• Donations to registered charities.
• Depreciation on items used for work purposes, such as motor vehicles, computers, mobile phones, scientific calculators or other tools of trade.
• Health costs. If your health expenses – doctors, hospitals, dental, physiotherapy, optical, hearing aids and batteries - total more than $1,500 (after deducting any rebates), you may be eligible for further deductions.
• Health insurance. If you have private health insurance, you are exempt from the Medicare surcharge.
• Negative gearing. Interest paid on money borrowed to buy shares, property and some other income producing investments is tax deductible. When applied to real estate, negative gearing indicates the difference between the income and expenditure on the property; if expenditure exceeds income, the property is said to be negatively geared.
• Contributions to superannuation of spouse or de facto. Taxpayers who contribute to their spouse's superannuation are eligible for rebates.

Check that you have filled in your deductions correctly. If the Tax Office reviews your return and discovers that deductions have been incorrectly calculated, you will have to pay the tax shortfall, as well as interest and any penalty that is imposed.

The Tax Pack simplifies the process of filing a tax return, explaining very clearly what you can and can't claim. Most people have no trouble completing the form. However, if you need advice or clarification of a particular issue, The Australian Tax Office has a Tax Help service for people who, because of age, disability, language difficulties or inability to pay a tax agent, need assistance in filing their tax returns. You can also access the Tax Office on the Internet.

If your affairs are complicated and you are unsure about what to do, it might be best to contact a tax agent. The agent may deduct your fee from your refund or may request payment at time of consultation.

Remember, even if you employ a tax agent, you are the one responsible for getting the return in on time and ensuring it is correct.

* You will need to have receipts in order to substantiate expenses claimed.

In the recent Federal Budget, Medicare levy thresholds will increase in line with the CPI for the financial year 2002/2003. Now the Medicare levy is not payable until your level of income is:

• $15,062 for single taxpayers (previously $14,539)
• $25,417 for a family (previously $24,534)
• An extra $2,334 for each dependent child (previously $2,253)
• $17,164 (previously $16,570) for single pensioners under age pension age.

Also, from 1^st July, the single taxpayer thresholds for senior Australians (i.e. those over age/service pension age) will increase as follows:

• from $20,000 to $20,500 for singles
• from $31,729 to $33,612 for families/couples (or from $16,306 to $16,806 each).

Telstra has been in the news lately, particularly over the sale of their ‘so-called’ outstanding debts to Alliance. If you are the recipient of one of these debts, or have a disputed debt or a default listing on your credit information, contact the Telecommunications Industry Ombudsman (TIO) in your state and lodge a complaint for investigation.

Every effort has been made to ensure that the information on this newsletter is accurate. However, the information is not intended as professional advice and the authors shall have neither liability nor responsibility to any person or entity with respect to any loss or damages arising from the information contained in this newsletter.

Copyright 2003 Sheila Freeman Consulting