Tips for happy returns

Courtesy CPA Australia
TAX experts from the nation’s largest accounting and finance organisation, CPA Australia, have prepared the following key tips to assist individual taxpayers with their 2005 tax returns.
Family assistance
Most taxpayers will receive Family Assistance payments as direct fortnightly payments from Centrelink, or as reduced childcare fees.
A taxpayer may also apply to have reduced PAYG amounts withheld from salary or wages in lieu of the other options.
Alternatively, the family tax benefit (FTB) can be obtained on lodgment of a tax return. But make sure not to ‘double dip’.
Families who have had a baby or gained legal responsibility for a child after 30 June 2001 and before 1 July 2004 may, depending on their circumstances, be able to claim up to $2500 (or a minimum of $500) per year for the first five years after the date of birth up until 30 June 2014. This is under the government’s former baby bonus (or first child tax refund) scheme. For further information, go to the ATO website or see a CPA.
Income Alienation
The tax rules on alienation may impact on contractors deriving personal services income, but not carrying on a personal services business (PSB).
In this event, income of a personal services entity may be subject to the PAYG withholding rules and also required to be included in the individual’s return.
PSBs also need to be aware of the ATO’s strict approach to income retention and income splitting and should seek advice from their CPA.