457 and LAFHA for US Citizen

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457 and LAFHA for US Citizen?

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• LAFHA (Living Away from Home Allowance) is not en entitlement; it is only paid if your employer agrees to pay it, and to agree to pay it, your employer and his/her financial advisers must know the facts on LAFHA.
  
  
  LAFHA can continue for the whole 4 years you are on a 457 visa, so long as you intend to return home. The moment you decided not to return home and apply for PR, LAFHA must stop.
  
  
  LAFHA is an allowance that your employer pays you by effectively reducing the tax you pay, and paying that amount to you as LAFHA. Therefore it’s a tax free allowance and does not cost your employer a cent.
  
  
  The Main Components of LAFHA
  
  
  The two main components of LAFHA are:
  The Accommodation Component. The accommodation component is exempt from FBT where it is “reasonable” to conclude that the nature of the accommodation is such that the costs are those that the employee could reasonably be expected to incur. It is usually paid to the amount of an accommodation lease.
  The Food Component. The food component is paid exempt from FBT when it is paid to the amounts published by the ATO each new FBT year.
  
  
  The other claimable items are:
  
  
  Temporary Accommodation and Food Allowance at the Home Location. Up to 7 days.
  Storage of Furniture. Should an employee need to store furniture while working in Australia, the cost of that storage can be deducted from their taxable income on presentation of receipts.
  Removal Costs. The costs associated with removal, packing, unpacking and insurance of household effects can be claimed in on presentation of receipts.
  Cost of Travel. The cost of economy travel to Australia for foreign citizens, or within Australia for Australian citizens, for the employee and all dependents. This includes all costs associated with that travel such as taxis, accommodation and meals.
  Temporary Accommodation and Food Allowance at new Location. Up to 21 days.
  Utilities Reconnection. The connection of gas, electricity and telephone services to the new home may be claimed presentation of receipts so long as it can be proved that those services were connected at the home locality.
  Cost of Travel home at the end of the temporary Employment. The cost of economy travel to return home for the employee/contractor and all dependents.
  Foreign Citizens Only - Returning home while still temporarily residing in Australia. An employee may return home any number of times a year, and subject to supplying receipts, claim 50% of the cost of travel for the employee/contractor and each of their dependents. This includes all costs associated with that travel such as taxis, accommodation and meals to and from the location.
  Foreign Citizens Only – Schooling. Children’s’ education expenses can be included in LAFHA for the tuition fees paid to an educational institution or tutor for full time education