Tax Update 2014

For Company

Repeal of company loss carry back

From the 2012-13 income year, the government provided tax relief for companies by allowing them to carry-back tax losses to receive a refund against previously paid tax.

The government announced that it intends to repeal the loss carry-back tax offset for the 2013–14 income year and later income years.

If the repeal of the offset is enacted as announced, tax payers will no longer be entitled to claim the offset in the 2013–14 income year.

For Small Business Entities

Small business simplified depreciation rules

Under current law a small business can claim

· an immediate tax deduction for “individual” assets costing less than $6,500 ex GST

· an accelerated depreciation tax deduction of $5,000 ex GST for new or second hand motor vehicles acquired during the year.

As part of the changes contained in the “Mining Tax Repeal Bill”, the Government has proposed to

· reduce the instant asset write-off from $6,500 to $1,000 on or after 1 January 2014.

· remove the special depreciation rules for motor vehicles from 1 January 2014

Individual

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 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.

Net medical expenses tax offset

The net medical expenses tax offset is being phased out from 1 July 2013.

To be eligible for the offset this year, the clients 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.

Changes from 1 July 2014

Medical levy will be increased from 1.5% to 2%

Two tax offsets will also be abolished from 1 July 2014

Dependent Spouse Tax Offset

Mature Age Worker Tax Offset

Superannuation rates will increase to 9.5% from 9.25% from 1 July 2014. It will remain at 9.5% until July 2018. The general concessional (before tax) contributions cap for 2013-14 is $25,000.

However, from the 1 July 2013 if you are 59 years old or over on 30 June 2013, additional concessional contributions will be able to be made to your super, with the cap increasing from $25,000 to $35,000.

From 1 July 2014:

the higher cap of $35,000 will also apply to people who are 50 years or over

the general concessional contributions cap will rise to $30,000.

the company

Superannuation contributions caps

Concessional contribution

Income year Under 50 50 years to 59 years 60 years and over
2014/2015 $30,000 $35,000 $35,000
2013/2014 $25,000 $25,000 $35,000
2012/2013 $25,000 $25,000 $25,000

 

Non-concessional contribution

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