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Dependent Spouse Tax Offset - Phasing Out 2013

Tax Accountants Penrith

 From 1 July 2012, if you have a dependent spouse born on or after 1 July 1952, (that is less than 60 years old at 1/7/2012) you may no longer be entitled to claim the dependent spouse tax offset. The offset is being gradually phased out as the population ages (and the Federal Government tries to balance the budget).

Commencing from 28 September 2012, the ATO will send letters directly to affected taxpayers, to make them aware of the change.

If you were claiming the maximum rebate in 2012 for your dependant spouse who is less than 60 years of age at 1st July 2012, this change will reduce your 2013 Income Tax Refund by $2,355.

Contact us at A Grade Tax Accountants Penrith on (02) 4731-1405  for all your taxation, accounting and tax advice for business and individual clients.

Small Business Superannuation Clearing House

Small Business Superannuation

Reduce your paperwork.

Make all your employee superannuation contributions in one transaction.

There's a simple way to meet your employee's superannuation obligations and reduce your administrative burden.

If you have 19 or less employees, you can pay all your employee superannuation contributions in one secure electronic transaction through the Small Business Superannuation Clearing House (the Clearing House).

This free online service is provided by the Australian Government to help you meet your superannuation obligations.

Simply visit www.humanservices.gov.au/smallbusinesssuper to register your business details and receive your secure user ID. Once you've registered, it will take just a few minutes to enter your employee's details - you only need to enter their details once.

Over 20,000 small businesses are already using the Clearing House.

If you're already using the Clearing House, you'll now find it even easier to use. In addition to the existing payment methods, you can now make your employee superannuation contributions using Electronic Funds Transfer.

If you have any questions, please email SBSCHenquiries@humanservices.gov.au or call 1300 660 048.

Contact us at A Grade Tax Accountants Penrith on (02) 4731-1405 for all your taxation, accounting, bookkeeping services, superannuation, tax returns and  advice for personal and business clients.

 

Education Tax Refund Transitional Payment - School Kids Bonus

Tax Accountant Penrith NSW

The 2012-13 Federal Budget scrapped the Education Tax Refund (ETR) for 2012 and replaced it with the School Kids Bonus, to commence in January 2013.

The much talked about transitional “ETR Payment” will replace the ETR entitlement that would have been available in the 2012 tax return. This transitional ETR Payment will be paid in June 2012.

The ETR Payment lump-sum amount will be paid to all families entitled to Family Tax Benefit Part A on May 8th this year for a school aged child, as well as to young people in secondary education who are receiving certain student income support payments on May 8th and to eligible recipients under the Veterans' Children Education Scheme or the Military Rehabilitation and Compensation Act Education and Training Scheme.

The one-off ETR payment will be $409 for a child in primary school and $818 for a secondary school child - the same maximum amounts that would have been available in the 2011-12 tax return.

No adjustments or apportionments will apply to the transitional ETR Payment for children who started or finished school in the 2011-12 financial year.

So, for parents entitled to FTB Part A on 8 May 2012,  if you have a child who started primary school in 2012 you will receive the full primary payment.  Similarly, a child who is participating in a school based apprenticeship, will be entitled to the full Secondary payment.

The School kids Bonus will be available from 2013 to families receiving Family Tax Benefit Part A, plus young people in school receiving income support payments such as youth allowance, ABSTUDY, disability support pension and veterans' educational allowances, on the eligibility test date.

2012 Federal Budget Changes affecting Businesses

Accountants Penrith

This article contains a summary of the key tax changes announced in the 2012 budget that impact on businesses and the various other tax and compliance measures announced over the past 12 months that also impact on all businesses and apply from 1 July 2012.
 
FEDERAL BUDGET TAX CHANGES
 
(1) Income Tax
 
No reduction in company tax rate
 
The company tax rate cuts to 29 and 28% have been shelved, including the small business tax rate reduction to 29% that was due to start from 1 July 2012.
 
Company tax loss carry-back
 
Companies, and entities taxed like companies, will receive a tax loss carry-back concession. The concession is limited, however, to company tax losses incurred in the 2012-13 income year and thereafter. Tax losses in the 2012-13 year may be carried back one year only, and company tax losses in later years may be carried-back for up to two years.
 
The company carry-back loss concession is limited to $1.0m of company income (revenue) losses, incurred from the 2012-13 income year, and may be carried-back only to receive a refund of income tax paid, in the previous one or two years as the case may be, that is represented by franking credits remaining in the a company’s franking account. The tax benefit is limited up to $300,000 per year. The tax benefit will not be received by a company until it has lodged its income tax return for the year it incurs the tax loss.
 
(2) Superannuation
 
Increase in the Contribution Tax Rate to 30% in Some Cases
 

Mature Age Worker Tax Offset Phase Out

Tax Accountant Penrith NSW

 As part of the 2012 Federal Budget, the government announced that from 1 July 2012, eligibility for the mature age worker tax offset will be confined to taxpayers born before 1 July 1957.

This means taxpayers must have turned 55 prior to 1 July 2012 to receive this offset.

The $500 tax offset remains unchanged in all other respects.

Contact us at A Grade Tax Accountants Penrith  on (02) 4731-1405 for all your taxation services, accounting, bookkeeping, tax returns, superannuation, retirement planning and tax advice for business and individual clients.

Superannuation and the 2012/13 Budget

Superannuation Penrith

A Grade Tax as a leading firm of Penrith Accountants, are able to assist clients with their SMSF requirements.

DEFERRAL OF THE HIGHER CONCESSIONAL CONTRIBUTION CAPS
There were two announcements made in the budget that will impact superannuation members, the higher tax rate on contributions for high income earners and the deferral of the higher concessional contribution cap for individuals aged 50 and over. The deferral of the higher cap is by far of greatest significance as individuals nearing retirement have watched as the Government has stripped away the amount able to be contributed over the past few years.
Having originally cut the concessional cap in half in 2009/10, to take effect from 1 July 2012 for those aged 50 and over, the Government then announced they were increasing the concessional cap to $50,000, as long as an individual’s superannuation balance was less than $500,000. Having determined that this is now too difficult to implement by 1 July 2012, they have postponed the measure until 1 July 2014.
The end result is that an individual aged 50 or over is now limited to $25,000 from 1 July 2012 regardless of their account balance. This is compounded by the fact that the Government have frozen indexation of the concessional cap until 1 July 2014, a measure announced late in 2011.
To further discourage individuals aged 50 and over who earn income greater than $300,000 they will be taxed at an additional rate of 15% on their $25,000 contribution which means they will end up paying the same tax on $25,000 as they would have previously on $50,000. That leads us to the second announcement that we had all expected.

Deductibility of Property Investment Loan Interest

Rental Property Advice, A Grade Tax Penrith

The Australian Taxation Office has flagged it will crack down on property investors claiming deductions for interest expenses on certain types of loan arrangements.

Property owners using some or all of the rental income from an investment property to pay off their own home loan while adding the interest from the investment loan to the principal of the investment loan and claiming it as a deduction would come under the scrutiny of the Australian Tax Office.


In a determination last month, the ATO said it would reject such arrangements.

The capitalisation of interest on an investment loan while the loan repayments are used to pay down the principal of a private loan is now under the spotlight.

The ATO's determination will apply retrospectively and could affect a landlord's past income and deductions, potentially costing them thousands of dollars.

A conservative approach should be adopted and property investors would be well advised to avoid claiming deductions for any compounding interest on their investment loan.

For further information contact A Grade Tax Accountants Penrith (02) 4731-1405.

Medicare Levy and Medicare Levy Surcharge Changes

A Grade Tax Penrith NSW

As a result of the 2009-10 Federal Budget, the government will be introducing an income test for the Private Health Insurance Rebate to apply from 1 July 2012.The rebate, which can be received as a reduction in policy premiums or as a rebate on your tax return, is currently 30%. From 1 July 2012 that rebate and AND the Medicare Levy Surcharge will be income tested against three income tier thresholds.

The ATO says the  "Higher income earners will receive less private health insurance rebate or, if they do not have the appropriate level of private patient hospital cover, the Medicare levy surcharge may increase."

The table below illustrates the income thresholds and rates to apply:


Unchanged

Tier 1

Tier 2

Tier 3

 Singles

$84,000 or less

$84,001-$97,000

$97,001-$130,000

$130,001 or more

 Families

$168,000 or less

$168,001-$194,000

$194,001-$260,000

$260,001 or more

Rebate

Aged under 65

30%

20%

10%

0%

Aged 65-69

35%

25%

15%

0%

Aged 70 or over

40%

30%

20%

0%

Medicare levy surcharge

Senior Citizens and Stamp Duty Concessions

Retirement Planning, Penrith Accountant

If you are a Senior who owns property in New South Wales or is thinking of purchasing a property in New South Wales you need to be aware of the new legislation passed through Parliament exempting you from the payment of stamp duty in certain circumstances.
 
This important piece of legislation is called the Duties Amendment (Senior’s Principal Place of Residence Duty Exemption) and will be in effect from 1st July, 2011 to the 1st July, 2012. This legislation contains good news for Senior Citizens who are looking to relocate to smaller accommodation.
 
What is the Senior’s Principal Place of Residence Duty Exemption?
 
The Senior’s Principal Place of Residence Duty Exemption is an exemption from stamp duty for Senior’s between the age of 55 and 65 years purchasing a new house which has never been occupied before or purchasing an off the plan home.
 
How long is the stamp duty exemption available?
 
The Senior’s stamp duty exemption is only available for contracts entered into after 1st July, 2011 and before 1st July, 2012.
 
How do I qualify for the stamp duty exemption?
 
To be eligible to receive the Senior’s stamp duty exemption you must satisfy the following criteria:
 
1. Be between the ages of 55 and 65 years.
 2. Enter into a contract for the purchase of a new house which has never been occupied before or an off the plan home between the 1st July, 2011 and the 1st July, 2012.
 3. Move into the house within twelve months of the settlement of the purchase and occupy the house as your principle place of residence for a continuous period of twelve months.
 4. Owned and occupied a home in New South Wales in the previous twelve month period and sell this property within six months of entering into the contract for their new home.

Taxable Payments Reporting - Building and Construction Industry

Bookkeeping Penrith

From 1 July 2012, businesses in the building and construction industry need to report the total payments they make to each contractor for building and construction services each year. You need to report these payments to the Australian Taxation Office (ATO) on the Taxable Payments Annual Report.
 
To make it easier to complete the annual report you may need to change the way you currently record your contractor information.

Background

As part of the 2011-12 Federal Budget, the government announced the introduction of taxable payments reporting for businesses in the building and construction industry.

The aim of the system is to improve compliance with tax obligations by those contractors who are currently not doing the right thing.

The information reported about payments made to contractors will be used for the ATO's data matching to detect contractors who have not:

  •     lodged tax returns
  •     included all their income in returns that have been lodged.

Who needs to report?

From 1 July 2012 you need to report if all of the following apply:

  •     you are a business that is primarily in the building and construction industry
  •     you make payments to contractors for building and construction services
  •     you have an Australian business number (ABN).

You are considered to be a business that is primarily in the building and construction industry if any of the following apply:

  •     in the current financial year, 50% or more of your business activity relates to building and construction services

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