Natural disasters - October 2013
In October 2013, bushfires caused significant damage to some areas of New South Wales.
What is the Australian Tax Office (ATO) doing to help?
If your business or residential address is in one of the identified affected postcodes listed below, the ATO will automatically make arrangements to defer the following taxation obligations (you don't need to apply for a deferral):
Lodgment and payment of income tax returns due between October and December 2013 to 28 January 2014
Lodgment and payment of the September quarterly activity statement from the original due date of 28 October 2013 to 28 January 2014
Lodgment and payment of the September monthly activity statement from the original due date of 21 October 2013 to 28 January 2014
Lodgment and payment of the October monthly activity statement from the original due date of 21 November 2013 to 28 January 2014
Lodgment and payment of the November monthly activity statement from the original due date of 21 December 2013 to 28 January 2014.
Exclusions to the above deferrals:
Large withholders (previously withheld more than $1 million annually or are part of a corporate group that has) are not eligible for the above deferrals.
The Commissioner cannot vary the contribution due date or waive the nominal interest on late super guarantee payments.
All deferrals granted for later dates will still apply. If you are affected by a natural disaster and you need further assistance or your business is outside the following postcodes, phone the ATO on 1800 806 218.
Any clients affected by the recent bush fires should not hesitate to contact us at A Grade Tax Accountants Penrith for any assistance with their tax matters.
Max Connelly from A Grade Tax Accountants Penrith has been accredited by ASIC as a Self Managed Super Fund (SMSF) auditor.
Contact A Grade Tax to arrange a quotation for your SMSF audit requirements.
There are three important changes to the simplified depreciation rules that apply from the 2012-13 financial year:
- the instant asset write-off threshold increased from $1,000 to $6,500
- a quicker initial deduction of up to $5,000 for motor vehicles
- the long-life small business pool and the general small business pools have been consolidated into a single pool.
For more information, refer to Changes to small business concessions for 2012-13.
Contact A Grade Tax Accountants Penrith on (02) 4731-1405 for all taxation accounting services.
Back in 1995, Self Managed Super Funds (SMSFs) made up less than 8% of superannuation industry assets. But a swag of appealing characteristics has sent their market share soaring.
The growth in self-managed super funds has been spectacular over the past 19 years. In all important areas – assets under management, membership growth, number of funds and average account balance – SMSFs are thrashing the professionals.
In 1994, there were about 80,000 SMSFs in Australia, with about $11 billion in assets. ATO data shows that in September 2012, there were 478,000 SMSFs, with 913,550 members and a total of $439 billion in assets. That’s almost one-third of the $1.4 trillion Australians have socked away for retirement.
The remarkable growth of SMSFs shows no sign of slowing. Australians are now pouring $26.5 billion into SMSFs every year – that’s just over $500 million into SMSFs every week.
What is driving the growth of the self-managed super fund sector now? With SMSFs typically set up by people approaching retirement, Australia’s large baby boomer generation is having an obvious impact. However, Tax Office figures also point to a noticeable increase in people under 45 joining small funds.
As the following list makes clear, there’s not one simple explanation for the growth of self-managed super funds.
But for both young and old Australians, the appeal of having their retirement fate in their own hands is undeniable.
An SMSF gives investors the ability to apply the same principles to their retirement assets as they apply to their own home.
2. Avoiding larger organisations’ performance problems
The low income super contribution (LISC) is a government payment to help low income earners save for their retirement.
From the 2012-13 income year, your LISC is 15% of the concessional (before tax) super contributions you or your employer make. The maximum payment you can receive for a financial year is $500 and the minimum is $20.
You are eligible for a LISC if:
- You have concessional contributions for the year made to a complying super fund
- Your adjusted taxable income does not exceed $37,000 (if you are required to lodge a tax return)
- You are not a holder of a temporary resident visa (New Zealand citizens in Australia do not hold temporary resident visas and are therefore eligible for the payment)
- 10% or more of your total income is derived from business or employment
- The amount payable is $20 or more.
The ATO will pay a LISC directly to your complying super fund. Make sure your fund has your tax file number as it cannot accept a LISC on your behalf without it. It may take up to 14 months from the end of the financial year for the payment to reach your fund.
Your super fund will show the LISC on your member statement.
For more information about the low income super contribution, refer to Low income super contribution.
See A Grade Tax Accountants Penrith for all your Taxation Services and Self Managed Super Fund advice.
The government have announced a restriction on the tax concessions available to super funds in pension phase. From 1 July 2014, future earnings (such as dividends and interest) on assets supporting pensions will be tax free up to $100,000 a year for each individual. Earnings above $100,000 will be taxed at the same concessional rate of 15% that applies to earnings in the accumulation phase.
This $100,000 threshold will be indexed annually with CPI and will increase in $10,000 increments.
The government has indicated that this reform is expected to affect only around 16,000 Australians who have balances around or above $2,000,000.
Special provisions will apply to capital gains incurred on assets purchased prior to 1 July 2014:
For assets purchased prior to 5 April 2013, the reform will only apply to capital gains that accrue after 1 July 2024;
For assets purchased between 5 April 2013 and 30 June 2014, individuals will have the choice of applying the reform to the entire capital gain, or only that part that accrues after 1 July 2014; and
For assets purchased from 1 July 2014, the reform will apply to the entire capital gain.
Persons therefore have approximately ten years to determine how they will restructure their superannuation assets to account for the new reforms.
These new reforms will not affect the taxation of superannuation withdrawals, these continue to be tax free after age 60.
2012 Personal Tax Return Checklist
It will assist us to maximise your refund if you review the following checklist and bring all relevant information with you to your appointment.Download a printable PDF version of this newsletter here
- Payment summaries for wages.
- Centrelink Statement in respect of:
- Tax-free Exempt Pension income received. (e.g., Disability Support Pension, Carer payments and Invalidity Service Pension etc.)
- Taxable support payments such as Newstart
- Payment summaries for superannuation pensions, lump sums and employment termination payments.
- Payment summaries for govt pensions & allowances.
- Interest received from banks etc.
- Dividends received or reinvested (bring statements).
- Partnership and/or Trust income.
- Managed Funds (investments) Tax Statements.
- Details of business income and expenses, including GST information where applicable.
Tax Time is again upon us. Please ring for an appointment to complete your Tax Returns this year with either Donna, Tynna, Peter or Max.
It is important that anyone considering an investment proposal seeks our advice with regard to the taxation consequences and options available to minimize taxation. For example there can be very significant tax advantages available by holding an investment in a Self Managed Super Fund rather than your own name.
We provide a full range of taxation services including:
- Advice regarding the best tax structure for the formation of new businesses. It is always best to discuss your new business proposal before committing to any new venture.
- Company and Family Trust returns.
- Formation and administration of Self Managed Super Funds ( SMSF ).
- Investment property tax advice.
- Our mobile lending service offers a wide range of finance options for home&investment loans plus asset financing.
Please review our checklist and tax tips on the following pages to assist with the preparation of your returns.
See you soon and thank you again for your referrals over the past year.
B.Comm FIPA JP
Employers across Australia will have new super obligations under a range of reforms that are being implemented from 2013 to 2019.
From 1 July 2013, employers must:
- Increase the minimum rate for super guarantee payments on behalf of their employees from 9% to 9.25%, and
- Start making super guarantee contributions for employees aged 70 years and over with the removal of the existing upper age limit.
This measure will significantly increase future retirement incomes for Australian workers through the gradual increase in the superannuation guarantee (SG) rate to 12 per cent.
The SG rate will be increased gradually with initial increments of 0.25 percentage points on 1 July 2013 and on 1 July 2014. Further increments of 0.5 percentage points will apply annually up to 2019‐20, when the SG rate will be set at 12 per cent.
Further information contact A Grade Tax Accountants Penrith on (02) 4731-1405 for retirement tax planning, accounting and tax advice.
For the 2013 tax year, the government have introduced simpler depreciation rules which will provide additional benefits to many businesses via:
- an increase to the instant asset write-off thresholds,
- consolidation of depreciation pools, and
- accelerated initial deduction for motor vehicles.
Increase to the instant asset write-off thresholds
Previously for assets costing less than $1,000 an immediate tax deduction or write-off was available. This threshhold has now been increased to $6,500 providing a significant tax benefit.
Additionally, if the SBE General Pool balance drops below $6,500 then the entire value of the Pool will be able to be written-off and claimed as a tax deduction.
Consolidation of depreciation pools
All assets previously added to the Long Life Pool and depreciated at 2.5% can now be transferred to the SBE General Pool and depreciated at 30%, again providing a significant tax benefit.
Accelerated initial deduction for motor vehicles
For any motor powered road vehicle we are able to claim an immediate tax deduction for the first $5,000 of the purchase price and then claim the traditional SBE General Pool depreciation of 30% on the balance.
This does not apply to road vehicles if:
- The main function is not related to public road use, or
- If the vehicle's ability to travel on a public road is secondary to it's main function.
Further information contact A Grade Tax Accountants Penrith for all your taxation, accounting, bookkeeping, superannuation, tax returns and tax advice.
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