Case Study

Introduction

Under Australian Tax rulings , David is an individual tax payer during the time of being an Australian resident apart from the fact that David held an employment as Accountant in an accounting firm . To work in Australia , Tax Number (TFN ) is issued from Tax office and TFN is required to be provided in Employment Declaration Form and in case TFN is not quoted , a tax of 47 cents is deducted for every dollar that is earned in Australia

Further Income Tax Returns are to be d by individuals who are income

br earners before the end of every financial year . The tax year-ends in Australia on June 30 and extension last date for filing Income Tax return is October 31 . In case individual is leaving Australia , filing of Income Tax Return can be done much before June 30 and in case there are excess funds it would be refunded by Tax office

David resigned job on 30 May 2006 , a little before the expiry of financial year and with this presumption that employer might have provided a summary report of income earned and how much of tax deducted out of the same . One of the copies of summary report of income required to be along with Tax Return at the time of filing with Tax office . Tax office would refund the excess payment if any , to any address either Australia or overseas that is provided in Income Tax Return

David is entitled for 20 days of Annual leave per year while holding employment which were not availed by David and therefore employer is required to compensate non-avail of Annual leave . Considering the fact that employer has compensated Annual leave for David , discloses another fact that David held employment for a period of one year or may be more and that employer had taken note of TFN and the eligibility factors of Family Tax Benefit (FTB ) tax claim instructions , which has two parts A and B . Part A states that benefits can be claimed towards the cost of nourishment of children whereas Part B is designed to those families which have only a single parent income and in this Sarah was a housewife in Australia and the family was living under David 's salary earnings only . Therefore David is eligible for FTB

Another supporting point in this effect is that , any lump sum arrears that is received through previous employment is entitled for tax offset in the year 2006-07 provided a separate sheet of additional information detailing the source of arrears and TFN is required to be along with Income Tax Return to claim tax offset

David is clearly exempt from paying any taxes to Tax office whereas filing is Income Tax Return is essential with the fact that previous financial year , David held employment in Australia and to this effect a mention of Annual income of previous year , TFN , a separate sheet of arrears received as compensation of unavailed Annual Leave has to be clearly stated apart...