Outsourcing Services For AUSTRALIA
Outsourcing services involves the practice of enlisting external companies or individuals to perform tasks or services that would typically be handled by in-house staff. These outsourced functions can encompass a wide range of activities, including customer service, IT support, accounting, and more.
Types of Income
Assessable income refers to the income on which you are obligated to pay taxes if it exceeds the tax-free threshold. Here are some examples of assessable income:
If you receive income in the form of cash, including cash cheques, you must declare this income when preparing and filing your tax return. In most cases, you can claim the tax-free threshold of $18,200 for one source of income earned during the income year.
Exploring Exempt Income
Exempt income is income that is not subject to taxation, meaning it is tax-free. However, you may still need to report these amounts in your tax return for use in other tax calculations. Examples of exempt income can include:
Examples of exempt income can include:
If your sole source of income during an income year consists of exempt income, you are not required to pay any income tax on it.
Understanding Non-Exempt Income
Non-exempt income refers to income amounts that are not required to be reported in your tax return. Non-assessable and non-exempt income can encompass various sources, including:
Taxable income is the portion of your income on which you are obligated to pay taxes. It is calculated as the remaining amount after deducting eligible expenses. These deductions reduce the overall assessable income subject to taxation.
The formula for determining taxable income is as follows:
Taxable Income = Assessable Income - Allowable Deductions
To qualify for deductions, you must have incurred the expenses and not been reimbursed. Additionally, you typically need to provide evidence of these expenses. Deductions work by reducing the income amount upon which taxes are calculated, rather than directly reducing your tax liability.
Identifying Reportable Income
When preparing your tax return, it is essential to identify the types of income you must declare. This can include income from employment, government sources, and investments.
Amount That You Don't Need to Declare
Some income amounts you earn or receive do not require a declaration as taxable income. These include:
Residency for Taxation Purposes
Residency for tax purposes can diverge from your residency status for other reasons. It's essential to note that you may be a tax resident even if you aren't an Australian citizen or a permanent resident according to immigration regulations.
As an individual, you will fall into one of the following three categories:
Australian Resident for Tax Purposes
If you satisfy any of the residency tests, you are considered an Australian tax resident. This means you must declare your worldwide income, even if you've already paid taxes on it overseas. Typically, a foreign income tax offset is available to reduce your Australian tax liability on the same income.
You are classified as a foreign resident if you fail to meet any of the residency tests. As a foreign resident, you do not have access to a tax-free threshold and are exempt from paying the Medicare levy. However, you are still required to report any income earned in Australia, including capital gains from taxable Australian property, in your Australian tax return. If you have a Higher Education Loan Program or Trade Support Loan debt, you are obliged to disclose your worldwide income or submit a non-lodgement advice.
You are considered a 'temporary resident' if you hold a temporary visa and neither you nor your spouse qualifies as an Australian resident as per the Social Security Act 1991, meaning you are not Australian citizens or permanent residents.
You will be a ‘temporary resident’ if you hold a temporary visa and neither you nor your spouse is an Australian resident within the meaning of the Social Security Act 1991 (that is, not an Australian citizen or permanent resident).
You are considered to be a dual resident if you are a resident of Australia for domestic income tax law purposes, and a resident of another country for that other country’s tax laws. Where Australia has a double tax treaty with a foreign country, a treaty tie-breaker test would usually determine which country has the right to tax Australian and foreign-sourced income.
Tax Considerations for Children
If you have children under the age of 18 who receive unearned income, such as investment income, it's important to understand the special tax rates that apply to them. Here's a breakdown:
If you aren't an excepted person, you pay a different rate of tax for income that is not excepted income. This rule was introduced to discourage adults from diverting income to their children.
Savings accounts and shares
If your child is under 18 years old and they earn income in their savings account, you may need to consider who declares the interest. If they are under 18 and earn income from shares, you may need to lodge a tax return on their behalf. Income from a savings account is treated differently from income from children's shares investments.
Due Dates & Tax Rates
Individual Tax Rates
Tax rates are applicable as per the residential status of individuals .
They are defined as per the ATO rules .
Note: The above rates do not include the Medicare levy of 2%. Details of Medicare levy applicability will follow in the further study.
Example: Tax payable on A$ 190000
= 190000-180000 = A$ 10000 * 45/100 = A$ 4500 + A$ 51667 = A$ 56167 + 2 % (Ml)
= A$ 57290
These rates apply to individuals who are foreign residents for tax purposes.
Working Holiday Makers
The rates apply to a work holiday maker if you are a foreign or Australian resident not from a non-discriminatory article (NDA ) country. The term working holiday maker means an individual who has a visa subclass of 417: working holiday 462: work & holiday
Onboarding at a cost of 30 A$. Our bookkeeping services include bank reconciliation, credit card reconciliation, and monthly financial statements for the client.
For bookkeeping services, we offer monthly fixed pricing based on the monthly number of transactions. The pricing is as follows:
Income Tax Return Filling & Submission
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