a few questions

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a few questions; Work, Salary and Taxes
Topic Started: Aug 11 2010, 06:41:14 AM (1,078 Views)
sheowahya	Aug 18 2010, 11:44:01 PM Post #21
True Blue Mate Posts: 556 Group: Members** Member #196 Joined: Feb 19, 2007	Ausson Aug 18 2010, 10:32:19 AM What do you mean by 'most people can no longer earn foreign income tax free in Australia'? I came over in early May and earned one pay check in Australia prior to the end of June 2010. I have almost a full year of income in the US that I will need to declare, but I also paid taxes on that income prior to arriving, so beyond declaring it and having the taxes I paid used to calculate the taxes I'll be liable for on my Australian income I wont be double taxed on that US income will I? Is that statement more to do with investment income? Bloody taxes, if the Australian government were truly serious about stopping the brain drain, encouraging those who have left to return and welcoming new blood to move downunder they should sort this out. I don't mind paying fair taxes on income I've earned in the country in return for good services. Its worse than working in two US states in one tax year and having to figure out partial year tax returns for both states. Add to the mix that my husband is still in the US makes me wonder just what our 2011 tax return will look like when we file in 2012. If the tax burden is too great that would be one huge reason for me to return to the US. Australian residents who worked overseas USE to be able to earn unlimited income in foreign countries completely tax free in Australia. Starting 1 July 2009, the rules changed and unless you are in the armed forces, work for a charitable mission, or another government approved enterprise (and we haven't been notified that any company has received government approval yet) your earnings in a foreign country must be reported and tax paid in Australia. The good news is that this rule change was VERY well publicized to foreign employers and most have made the appropriate changes to pay Australian tax on behalf of their employees. Another bonus is that if you paid tax on your earnings in a foreign country, you will be able to claim back the foreign tax paid as a tax credit in Australia. No, you will not be double taxed. You will just have to report your earnings. Depending on the withholding rate applied to you in the States, it shouldn't effect your tax liability in Australia. Keep in mind that you can claim ALL of the taxes, federal, state, local, FICA, and medicare. The hard part for you will be that because you are married, your husband will file a joint return (doesn't have to, but will pay more tax if he doesn't) and once he files a joint return, your income from Australia will need to be reported in the States. However, you would have to earn over $91,400 (2009 figures) before there would be a tax liability.
	My Timeline ======= Category 136 BN - Skilled Independent. Skills Assessment: Applied ICAA: 13May05 Addtional Classes Required: 08Aug05 Re-submitted PASA: 05Feb07 Approved as Accountant 2211-11: 26Feb07 Main Visa Application: Sent to ASPC: 12Mar07 Application received: 16Mar07 Acknowledgement received: 10May07 Credit Card Charged: 10May07 CO assigned: TBD Medicals sent UNrequested: 26Jul07 PPC sent UNrequested: 18Jul07 VISA Approved: 07Nov07 Main move to Australia: 17Apr08


sheowahya	Aug 19 2010, 12:18:28 AM Post #22
True Blue Mate Posts: 556 Group: Members** Member #196 Joined: Feb 19, 2007	Margo Aug 18 2010, 02:39:00 PM Wow, I thought that I was sort of informed but I am VERY confused now. What is a novated lease? We are still checking on the LAFHA, but we do have a car provided by the company so I assume that this will be subject to FBT. We do not see bills for any auto expenses, including our petrol, so I guess we will be taxed for most of that? As far as taxes go, my husband's first paycheck was in July, so we were advised by his HR department not to file taxes in AU even though he actually worked for half of June. I'm also curious about Ausson's question regarding double taxation. I just assumed that it would more or less work out with the tax treaties. (Other than a higher rate here in Au, obviously.) I'm definitely finding someone to help with our taxes this year. I guess I would like to know if there is anything else I should do NOW that will lower our taxes. One more question for anyone whose head ISN'T spinning... we do invest heavily in the employee stock purchase plan and typically unload as soon as we can and pay the capital gains taxes. He has asked around his office and most co-workers don't participate. Are capital gains taxes treated similarly here or should we seriously consider holding the stock longer in order to avoid higher tax rates? I suppose it might be worth mentioning that my husband works for an Australian company (same name as US, but subsidiary of some sort I think) and is paid in Australian dollars just as any Aussie working for his company here. A novated lease is a finance arrangement where you own the car, but your employer is responsible for the payments. If you leave your current employment, you take the car and the liability for payments is transfered to you. You can transfer the payment arrangement to a new employer if they agree. The employer gets the benefit of claiming back the GST (substantial on a car purchase), you get something of value (the car), and because of the nature of a novated lease, there is no tax liability to you. It is as if the employer said "look, you need a car, you can either pay for it with your after tax dollars, or I'll provide it to you" if you took the cash remuneration package, you might get paid $100,000 for example, but using a novated lease, your employer would pay you maybe $80,000 cash and provide the car. It has to be set up correctly, or it can blow up in everyones face involved. You were advised correctly about not needing to file a tax return. Your husband earned NO income in June. His first paycheck wasn't until July, the new financial year. As for the international tax issue, I think I addressed that earlier. Make yourself VERY familiar with the deduction section of the "I" return (I for individual). Keep ALL your receipts for deductable items. Keep a diary (a calendar) and make note of any travel mileage, tax related dates, and any other notes to help with your return at the end of the year. You can find the I return HERE the deduction section is on page 4. As for your ESS (employee share scheme) (note item 12 on page 3 of the I return) I could get into all the new rules for ESS, but I don't want to make things worse for everyone reading this thread so I'll leave you with THIS link and the offer that if you have questions, please send me a PM.
	My Timeline ======= Category 136 BN - Skilled Independent. Skills Assessment: Applied ICAA: 13May05 Addtional Classes Required: 08Aug05 Re-submitted PASA: 05Feb07 Approved as Accountant 2211-11: 26Feb07 Main Visa Application: Sent to ASPC: 12Mar07 Application received: 16Mar07 Acknowledgement received: 10May07 Credit Card Charged: 10May07 CO assigned: TBD Medicals sent UNrequested: 26Jul07 PPC sent UNrequested: 18Jul07 VISA Approved: 07Nov07 Main move to Australia: 17Apr08


mamkai	Aug 19 2010, 07:41:20 AM Post #23
True Blue Mate Posts: 348 Group: Members** Member #3,577 Joined: Mar 12, 2010 I now live in... Melbourne I'm planning to move to... Back to the USA someday	Wow, Marilyn, you truly are fabulous. I will get busy on those links while unloading my container (yay) and get back to you if I have any questions.



boomerang	Aug 19 2010, 09:48:12 PM Post #24
True Blue Mate Posts: 165 Group: Members** Member #3,057 Joined: Mar 13, 2009 I come from... Darwin I now live in... Sydney via Minneapolis	Ausson Aug 18 2010, 10:32:19 AM What do you mean by 'most people can no longer earn foreign income tax free in Australia'? I came over in early May and earned one pay check in Australia prior to the end of June 2010. I have almost a full year of income in the US that I will need to declare, but I also paid taxes on that income prior to arriving, so beyond declaring it and having the taxes I paid used to calculate the taxes I'll be liable for on my Australian income I wont be double taxed on that US income will I? Is that statement more to do with investment income? Bloody taxes, if the Australian government were truly serious about stopping the brain drain, encouraging those who have left to return and welcoming new blood to move downunder they should sort this out. I don't mind paying fair taxes on income I've earned in the country in return for good services. Its worse than working in two US states in one tax year and having to figure out partial year tax returns for both states. Add to the mix that my husband is still in the US makes me wonder just what our 2011 tax return will look like when we file in 2012. If the tax burden is too great that would be one huge reason for me to return to the US. I would check out whether in fact you were a "resident" for tax purposes for 2009/2010 since you only arrived in May 2010. Plus I think that your foreign income prior to your moving to Australia shouldn't be reported since you weren't an Australian resident at that time.



Ausson	Sep 15 2010, 11:15:20 AM Post #25
True Blue Mate Posts: 165 Group: Members** Member #3,149 Joined: Jun 3, 2009 I come from... Sydney, Australia I now live in... Canberra, after 15 years in US (12 in Colorado) I'm planning to move to... lets see how this Canberra thing works out	Looking at the ATO site I found the following when trying to determine whether I'm an Aussie for tax Generally, we consider you to be an Australian resident for tax purposes if you: * have always lived in Australia or you have come to Australia to live * have been in Australia for more than half of the income year (unless your usual home is overseas and you do not intend to live in Australia � for example, you are a working holiday maker), or * are an overseas student enrolled in a course of study for more than six months duration. I think that these are all ORs and I fit into the 'you have come to Australia to live', but I will consult a tax agent to ensure I get that right.



sheowahya	Sep 15 2010, 09:13:21 PM Post #26
True Blue Mate Posts: 556 Group: Members** Member #196 Joined: Feb 19, 2007	Correct, these are all "or" options. If you fit into one of these categories, you are a resident for tax purposes. Cheers, Marilyn
	My Timeline ======= Category 136 BN - Skilled Independent. Skills Assessment: Applied ICAA: 13May05 Addtional Classes Required: 08Aug05 Re-submitted PASA: 05Feb07 Approved as Accountant 2211-11: 26Feb07 Main Visa Application: Sent to ASPC: 12Mar07 Application received: 16Mar07 Acknowledgement received: 10May07 Credit Card Charged: 10May07 CO assigned: TBD Medicals sent UNrequested: 26Jul07 PPC sent UNrequested: 18Jul07 VISA Approved: 07Nov07 Main move to Australia: 17Apr08


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