22 May 09 How to miss out on the tax bonusIn response to Member 6's feedback about franking credits and the tax bonus in last week's TAXVINE - see 2009 TAXVINE No 19 (15 May 2009), MEMBER 4 writes:
"In reply to Member 6, if you think a franking credit is a good reason to be excluded from the bonus, how about our client: taxable income $19,964 but excluded because she is in the last year of the old 5 year baby bonus scheme. She clearly picked the wrong year to have a child. I don't care who does or doesn't get the handout but I do care about the number of people misled by the simplistic advertising and the time we waste explaining to people why they won't get it. Clients have this unreasonable concept of "fairness" in the tax system."
MEMBER 5 writes:
"Like Member 6, I have been frustrated by the calculation method used for the tax bonus as it has created some rather ludicrous results. The bonus was promoted as a tax bonus for "Working Australians". Despite this, I have seen the bonus paid to a retiree whose only tax payment was a $30 Medicare levy, and no bonus to another client with $20,000 net business income and $55,000 franked dividend income from their company business. I can only assume that franking credits were included in the label G amount to eliminate taxpayers whose income was solely from investment rather than "working", however it has resulted in some inequitable results. The label G amount should be restricted to non-refundable offsets."