Introduction 1 Part 1: How You''re Taxed in Australia 5 Chapter 1: Understanding the Australian Tax System 7 Chapter 2: Taxing Australians: The Formula You Need to Know 17 Chapter 3: Lodging Your Tax Return: This One Is for the Nation 33 Chapter 4: Receiving a Visit: When the Tax Office Comes Knocking 47 Part 2: Income from Personal Exertion 55 Chapter 5: Taxing Employees: Working Class Folk 57 Chapter 6: Living in Your Castle: Main Residence 73 Chapter 7: Taxing Issues Affecting Students and Your Children 81 Part 3: Tax-Effective Investments 91 Chapter 8: Interesting Stuff: Bank Deposits and Tax 93 Chapter 9: Owning Part of the Company: Investing in Shares 99 Chapter 10: Building Your Dreams: Investing in Bricks and Mortar 113 Chapter 11: Catching Up on Capital Gains Tax 131 Part 4: Running a Business 147 Chapter 12: Structuring Your Business for Maximum Gain 149 Chapter 13: Starting a Business: On Your Mark! Get Set! Go! 165 Chapter 14: Reducing Your Small Business Tax Bill 181 Chapter 15: Collecting Tax for the Government: Goods and Services Tax 195 Chapter 16: Living on the Fringe: Fringe Benefits Tax 203 Chapter 17: Getting Wealthy: CGT and Small Business 213 Part 5: Thinking Long Term 221 Chapter 18: Preparing for Retirement Using Superannuation 223 Chapter 19: Reaping What You Sow: Receiving a Pension and Government Concessions 243 Chapter 20: Death and Taxes: Wills and Asset Distribution 257 Part 6: The Part of Tens 267 Chapter 21: Ten Ways to Minimise Your Tax while Keeping the Tax Office Happy 269 Chapter 22: Ten Common Tax Mistakes to Avoid 277 Appendix A: Taxing the Visitors: Non-Residents 287 Appendix B: Leading Tax Cases and Tax OfficePublications: Study Guide 293 Glossary 305 Index 311 Introduction 1 About This Book 1 Foolish Assumptions 2 Icons Used in This Book 3 Where to Go From Here 3 Part 1: How You''re Taxed in Australia 5 Chapter 1: Understanding the Australian Tax System 7 Explaining the Australian Tax System 7 Understanding Your Income Tax Rates 8 Federal taxes 9 State and local taxes 10 Taxing Major Income Streams 11 Taxing your treasures: CGT assets 11 Bringing home the money: International sources of income 11 Taxing a Company 14 Chapter 2: Taxing Australians: The Formula You Need to Know 17 Doing Your Sums 17 Declaring What You Earn: Assessable Income 18 Ordinary income 20 Statutory income 21 Keeping What You Receive: Exempt Income 21 Reducing Your Tax Bill: General Deductions 24 Checking out the first leg: First positive limb 25 Examining the next leg: Second positive limb 26 Being aware of the negatives: Negative limbs 27 Figuring out when something is incurred 30 Looking for Tax Offsets 32 Chapter 3: Lodging Your Tax Return: This One Is for the Nation 33 Preparing Your Individual Tax Return 34 Receiving a PAYG payment summary 35 Claiming work-related car expenses 36 Claiming work-related travel expenses 37 Claiming tax offsets (rebates) 38 Receiving a Thank-You Note: Notice of Assessment 40 Preparing Other Tax Returns 42 Partnership tax return 43 Company tax return 43 Trust tax return 44 SMSF tax return 44 Neglecting to Lodge Your Prior Years'' Tax Returns 45 Chapter 4: Receiving a Visit: When the Tax Office Comes Knocking 47 Being Honest with Yourself: Self-Assessment 48 Getting a Reality Check: Tax Audit 49 Preparing for an audit 50 Points to keep in mind 51 Mending Your Ways: Amendments and Objections 52 Part 2: Income From Personal Exertion 55 Chapter 5: Taxing Employees: Working Class Folk 57 Earning a Living: Salary and Wages 58 Determining your employment status 58 Reducing the burden: Receiving an allowance 59 Getting a living-away-from-home allowance 61 Adding to the nest egg via SG 61 Adding to the nest egg via personal contributions 63 Easing the pain: Getting a termination payment 64 Moving on: Getting a redundancy payment 65 Working Out Your Income Tax Rate 67 Claiming a Tax Deduction: What''s On the Menu 68 Proving what you did: Substantiation provisions 68 Common types of work-related deductions 69 Increasing your skills and knowledge: Claiming work-related self-education expenses 71 Chapter 6: Living in Your Castle: Main Residence 73 Addressing the Issue: This is Where I Live 73 Buying Your Main Residence: Taxation Concessions 74 Keeping What''s Yours: Exempt from Tax 77 Sharing What''s Yours: When You Have to Pay Tax 78 Maintaining a Home Office 79 Transferring Property: Marriage or Relationship Breakdown 80 Chapter 7: Taxing Issues Affecting Students and Your Children 81 Raiding the Piggy Bank: Taxing Under 18s 81 Taxing your children''s investment accounts 82 Taxing the paper round: Employment income 83 Getting a Distribution from a Trust 84 Checking Out Special Disability Trusts 88 Getting Something Back: Family Tax Offsets 89 Family Tax Benefit (Part A) 89 Family Tax Benefit (Part B) 89 Paid parental leave scheme 90 Child care subsidy 90 Part 3: Tax-effective Investments 91 Chapter 8: Interesting Stuff: Bank Deposits and Tax 93 Banking the Return: Interest 94 Interesting Claims 95 Investing in Life Insurance Bonds 97 Chapter 9: Owning Part of the Company: Investing in Shares 99 Sharing the Profits: Dividends 99 ''Frankly, my dear'' 100 Reducing dividend payments: What can I claim? 106 Borrowing to build your wealth: Interest payments 107 Taxing Your Gains and Losses 109 Investing in Overseas Share Markets 112 Chapter 10: Building Your Dreams: Investing in Bricks and Mortar 113 Collecting the Rent 113 Reducing the Costs: What You Can Claim 115 Apportioning Expenditure: The Bits You Can''t Claim 116 Claiming Specific Deductions: What''s on the List 117 Depreciating your assets 117 Understanding capital works deductions 120 Repairing what''s yours 122 Going in reverse: Negative gearing 123 Calculating non-deductible expenditure 124 Paying 10 per cent: Goods and services tax 126 Deriving rent from overseas 129 Chapter 11: Catching Up on Capital Gains Tax 131 Looking at the Rules: CGT Assets 132 Taxing your stamp collection: Collectables 134 Taxing your underwear: Personal use assets 134 Taxing all your treasures: Your other assets 135 Calculating a Capital Gain 137 Rolling in dough: Capital proceeds 138 Adding up the costs: Cost base 139 Going modern: After 21 September 1999 140 Getting a history lesson: Before 21 September 1999 142 Crying over spilt milk: Capital losses 143 Selling or Transferring Your Business Premises to Your SMSF and CGT 145 Investing in Cryptocurrency and CGT 145 Part 4: Running a Business 147 Chapter 12: Structuring Your Business for Maximum Gain 149 Choosing a Business Entity 149 Becoming a Sole Trader: Going It Alone 151 Inhaling the good news 151 Exhaling the bad news 152 Forming a Partnership: Sharing the Workload 153 Key partnership taxation principles 154 Sharing the good stuff 155 Taking on board the bad stuff 156 Creating a Company: The More the Merrier 157 Understanding the good bits 158 Dealing with the bad bits 159 Trusting in Trusts 161 Examining what''s good about trusts 162 Checking out the evils of trusts 163 Chapter 13: Starting a Business: On Your Mark! Get Set! Go! 165 Getting the Show on the Road 165 Obtaining a tax file number 166 Applying for an Australian Business Number 166 Registering for GST 166 Getting to Grips with Record Keeping 167 Taking on Employees 168 Examining Tax Concessions for Small Business 170 Choosing How You Recognise Your Income 173 Taking Stock of Things 175 Valuing your trading stock 177 Understanding the nitty gritty of trading stock 177 Planning Ahead: Business Succession Planning 179 Chapter 14: Reducing Your Small Business Tax Bill 181 Understanding the Rules: What Can I Claim? 181 Getting Specific with Problematic Deductions 184 Writing off your depreciating assets 184 Dealing with bad debts 185 Paying interest on borrowings 186 Borrowing expenses 187 Losing money by theft 189 Getting a legal opinion: Legal costs 189 Getting tax help: Tax-related expenses 190 Stamping a lease: Lease document expenses 190 Discharging the mortgage 190 Claiming a superannuation deduction 191 Using a service entity: Claiming for service fees 191 Running a primary production business 192 Losing money: Business losses 192 Chapter 15: Collecting Tax for the Government: Goods and Services Tax 195 Collecting 10 Per Cent 195 Taxing your sales: What are taxable sales (supplies)? 196 Examining input taxed sales (supplies) 199 Checking out GST-free sales (supplies) 199 Reg.