Latest Updates

1.CHANGES FOR SMALL BUSINESSES

ACCELERATED DEPRECIATION

Businesses with an annual turnover under $2 million can claim immediate tax deductions for as many $20,000 purchases as they make between 7:30pm on budget night and June 30, 2017, rather than having to claim those purchases as deductions spread over several years. This is a huge increase from the current instant asset write-off threshold of $1,000. Cars and vans, kitchens or machinery ... anything under $20,000 is immediately 100 per cent tax deductible ,in other words, any asset involved in running a business is covered by the scheme.
Assets over $20,000 are not eligible for the instant tax write-off, but can be fully written off over a longer period. Any assets over $20,000 can be added together and depreciated at the same rate. These assets are depreciated at 15 per cent in the first income year, and 30 per cent per year thereafter. If the value of the pool is below $20,000 until the end of June 2017 it can be immediately deducted too.

TAX CUTS

The Government is reducing the tax rate for the more than 90 per cent of incorporated businesses with annual turnover less than $2 million. The company tax rate for these businesses will be reduced by 1.5 percentage points to 28.5 per cent.This is the lowest small business company tax rate in almost 50 year. To help all Australian small businesses grow, the Government will also provide a 5 per cent tax discount to unincorporated businesses with annual turnover less than $2 million from 1 July 2015. This delivers a tax cut of $1.8 billion over the next four years.Further information on tax cuts for Small Business is available on the ATO website.

CUTTING RED TAPE

The Government will reduce red tape within the Fringe Benefits Tax (FBT) system by expanding the FBT exemption for work‑related portable electronic devices. This will help small business employees stay connected in the digital economy. Small businesses will also benefit from Capital Gains Tax rollover relief when changing their legal structures but keeping the same owners.Further information on changes to the FBT is available on the ATO website.

WAGE SUBSIDIES TO SUPPORT EMPLOYMENT
Employers who offer job seekers an ongoing job can receive a wage subsidy with flexible payment arrangements.

2: CHANGES FOR INDIVIDUAL

TAX RATES 2014-15

The following rates for 2014-15 apply from 1 July 2014.
TAXABLE INCOME	TAX ON THIS INCOME
0 – $18,200	Nil
$18,201 – $37,000	19c for each $1 over $18,200
$37,001 – $80,000	$3,572 plus 32.5c for each $1 over $37,000
$80,001 – $180,000	$17,547 plus 37c for each $1 over $80,000
$180,001 and over	$54,547 plus 45c for each $1 over $180,000

 

FOREIGN RESIDENTS

If you are a foreign resident for the full year, the following rates apply:

TAX RATES 2014–15

The following rates for 2014–15 apply from 1 July 2014.
TAXABLE INCOME	Tax on this income
0 – $80,000	32.5c for each $1
$80,001 – $180,000	$26,000 plus 37c for each $1 over $80,000
$180,001 and over	$63,000 plus 45c for each $1 over $180,000

 

PRIVATE HEALTH INSURANCE REBATE CHANGES

From 1 April 2014, rebate percentages are adjusted annually by a rebate adjustment factor. The rebate adjustment factor averages the increase in the consumer price index (CPI) and the premium price increase from insurers. It is calculated by the Department of Health each year. The adjusted rebate percentages are applied to premiums paid on or after 1 April – this means your client's rebate before 1 April will be different to the rebate on or after 1 April.

LIFETIME HEALTH COVER LOADING

From 1 July 2013, the rebate will also be calculated on the premium minus any Lifetime Health Cover (LHC) loading. LHC loading is a penalty that applies to individuals who have not taken out and maintained PHI from the year they turned 31.This means the private health insurance rebate may be calculated on an amount which is less than the total cost of the policy, reducing the amount of rebate your client is eligible to receive.

NET MEDICAL EXPENSES TAX OFFSET PHASE-OUT

The net medical expenses tax offset is being phased out from 1 July 2013.
To be eligible for the offset this year, you must have received the offset in their 2012–13 income tax assessment. Similarly, those who receive the tax offset in their 2013–14 income tax assessment will continue to be eligible for the offset in 2014–15. That is the final year the offset can be claimed.This does not apply to clients with out-of-pocket medical expenses relating to disability aids, attendant care and aged care. Those expenses can be claimed until 30 June 2019.

3: SUPER CONTRIBUTION CAPS

For the 2014-15 financial year the general concessional contributions cap for those younger than 50 years old in the 2014-15 financial year is $30,000.However, if you turn 50 years or older in 2014-15 you can contribute up to $35,000 before you may have to pay extra tax.
The non-concessional cap is $180,000 for 2014-15.
Contribution caps 2014-15