DAVE'S CORNER - INCREASE OF SUPER GUARANTEE CONTRIBUTIONS

DAVE'S CORNER - INCREASE OF SUPER GUARANTEE CONTRIBUTIONS The 1st July 2013 brings the start of the increase of the compulsory super guarantee to employees from the 9% current minimum to the eventual 12% in the 2019/20 financial year. These changes first announced in the 2010 Federal budget, apply to an employee’s ordinary time’s earnings. There will also no longer be an age limit on employees to whom an employer will have super guarantee obligations for. The minimum super guarantee contributions required to comply with legislation will be as follows: Year Commencing Minimum SG Contribution 1...

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DAVE'S CORNER - MAXIMISE YOUR SUPER CONTRIBUTIONS BY 30 JUNE 2013

Make the most of your contributions caps* each year to ensure you maximise your super balance and tax benefits. Why? Because after 30 June, that financial year’s contribution caps can generally not be carried over. Concessional super contributions can be made from your pre-tax salary or business income, and are currently taxed in the fund at a maximum rate of 15% (please note this rate may increase for higher income earners). This is likely to be lower than the marginal tax rate you pay on your salary or business income, meaning that you save the difference in tax. By investing more in super...

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DAVE'S CORNER - NET MEDICAL EXPENSES TAX OFFSET PHASE OUT

The Government has decided to phase out the net medical expenses tax offset with transitional arrangements for those currently claiming the offset. All claims from 1 July 2013 will be restricted to eligible taxpayers for out-of-pocket medical expenses relating to disability aids, attendant care or aged care expenses until 1July, 2019. This transitional phase coincides with the Disability Care Australia changes and the aged care reforms that have been in place for years. From 1 July, 2013, those taxpayers who claimed the tax offset for the 2012/2013 income year will continue to be eligible for...

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DAVE'S CORNER - NATIONAL DISABILITY INSURANCE SCHEME

For the first time, Australians with significant and permanent disabilities will get the support they need, via DisabilityCare Australia – the National Disability Insurance Scheme. The Australian Government has decided to provide over the course of 7 years, $19.3 billion dollars, beginning from 2012-2013. The Australian Government will provide funding of $11.7 billion dollars to DisabilityCare Australia in 2019-20 – the first year after full national rollout. This will represent 53% of the $22.2 billion total cost of running DisabilityCare Australia, with States and Territories providing the...

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DAVE'S CORNER - FEDERAL BUDGET

On the 14th of May, 2013, the Federal Budget was announced at 7:30pm. For those who missed it, some of the main key points for the announcement as are follows: Personal tax rates will stay the same From the 1st of July, 2014, work related expenses will be capped at $2,000. From the 1st of July, 2014, the Medicare levy will increase to 2% pa from 0.5% From the 1st of July, 2014, all pension asset earnings about $100,00 will be taxed at 15%. From the 1st of March, 2014, the Baby Bonus will be removed. However, families who are eligible for Family Tax Benefit (Part A) can receive $2,000...

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DAVE'S CORNER - REGISTERING FOR GST

It is vital that you register for GST if you run a business or other enterprise when your GST turnover is $75,000 or more. If you’re a non-profit organisation, the threshold is $150,000 or more. Please note, if you provide taxi travel, you must register for GST regardless of your turnover. To figure out your GST turnover, it is generally your gross business income excluding GST. If your current or projected GST turnover for any 12-month period reaches the registration threshold, you must register. For example, if you have just started a new business and expect it to earn $75,000 or more in...

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DAVE'S CORNER - REMOVAL OF CGT DISCOUNT FOR NON-RESIDENTS

On the 8th of March 2013, the Government released for comment the exposure draft legislation and accompanying explanatory material - relating to the removal of the 50% CGT (Capital Gains Tax) discount on capital gains accrued by foreign and temporary resident individuals after 8th May 2012. When a discount capital gain arises from a CGT event occurring after May 8, 2012, the discount percentage will be a percentage other than 50% where either: The CGT asset is owned by an individual; or A trust disposes of an asset and the discount capital gain is assessed to a beneficiary of a trust who is...

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DAVE'S CORNER - ONLINE SELLING: HOBBY OR BUSINESS?

If you sell products or services online, you need to understand whether you are doing it as a hobby or carrying on a business. A hobby is a spare-time activity or pastime pursued for pleasure or recreation. A business , on the other hand, requires some form of investment and enough customers to whom its goods or services can be sold on a consistent basis with the intention of making a profit. When selling online becomes a business, the income you earn from it is subject to tax. If this is the case, you may be eligible for tax deductions. If you don’t know if you are undertaking a hobby, or...

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DAVE'S CORNER - EXCESS CONTRIBUTIONS TAX SYSTEM CHANGES

The system of excess contributions tax, introduced by the Howard government in 2007, will be changed. The Government will now allow ALL individuals to withdraw any excess contributions made from the 1st of July, 2013 - from their superannuation fund. Excess concessional contributions will be taxed at the individual’s marginal tax rate, PLUS an interest charge to recognise that the tax on excess contributions is collected later than normal income tax. These rules will ensure that individuals are taxed on excess concessional contributions in the same way - as if they had received that money as...

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DAVE'S CORNER - CONTRIBUTIONS TAX INCREASE TO 30% PRIMARY TABS

We have not yet seen legislation to increase the contributions tax from 15% to 30% for individuals with an income about $300,000. The tax increase, which was announced in the May 2012 Federal Budget, is stated to apply from the 1st of July, 2012. The Government has recently confirmed that they intend to proceed with the tax increase from the 1st of July, 2012 start date. While legislation has not been introduced, there is still time for the Government as tax liabilities for the 2013 financial would not be raised until lodgement of 2013 personal income tax returns. At this point in time, we...

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