1. TAX EFFECTIVE INVESTMENTS
If you have a tax problem and want to obtain a large tax deduction prior for the 30th June, you can invest in Tax Office approved “Tax Effective Funds” which give a tax deduction of up to 100% of the amount invested. If you “negative gear” or borrow to invest and use the loan to capitalize 12 months worth of interest in advance, you can receive a tax deduction of up to 110% of amount invested. Call us now on 07 3367 0663 as the fund allocations are filling fast.
2. 30% CHILDCARE REBATE – CLAIMS START 2006
You could be eligible for a 30% rebate this tax year on your net childcare expenses incurred in the previous financial year. The maximum claim is $4000. Get a printout of fees paid from your kindy or childcare centre & give us a call to check eligibility.
3. MATURE AGE WORKERS TAX OFFSET
If you were aged 55 years or older on 30th June 2005, were an Australian resident and received income from working, you may be eligible for the mature age workers tax offset of $500.
4. PERSONAL INCOME TAX CUTS
Effective from 1 July 2006 the personal income tax threshold and rates will be amended as follows:
Current threshold Income range $ |
Current tax rate |
From 1 July 2006 Income range $ |
Tax rate from 1 July 2006 |
|---|---|---|---|
0-6,000 |
0% |
0-6,000 |
0% |
6,001-21,600 |
15% |
6,001-25,000 |
15% |
21,601-63,000 |
30% |
25,001-75,000 |
30% |
63,001-95,000 |
42% |
75,0001-150,000 |
40% |
95,001 + |
47% |
150,0001 + |
45% |
5. FAMILY TAX BENEFITS (FTB) PART A
From 1 July 2006, the amount a family can earn before their FTB Part A is reduced will increase to $40,000, up from the current $33,361. This is a further $2,500 above the planned increase of $37,500 which was to have taken effect from 1 July 2006. FTB Part A reduces by 20 cents in the dollar once the family income exceeds the income threshold until the base rate is reached.
6. SMALL BUSINESS RELIEF
Changes will be made to simplify and improve the alignment of the various concessions available to small businesses for the purposes of the following tax laws:
- the STS provisions; (Simplified Tax System)
- the CGT provisions; (Capital Gains Tax)
- the GST rules; (Goods & Services Tax)
- the FBT rules; (Fringe Benefits Tax) and
- the PAYG instalment rules. (Pay As You Go instalments)
These changes will apply from the start of the 2007-2008 income year.
7. FRINGE BENEFITS TAX REDUCTION IN RATE
From 1 April 2006, the FBT rate will be reduced from 48.5% to 46.5% to align the FBT rate with new top personal marginal tax rate (including Medicare levy).
8. SUPERANNUATION CO-CONTRIBUTIONS
On 1 July 2004, the super co-contribution increased from $1 to $1.5 for every $1 of your personal superannuation contributions, up to a maximum of $1,500 a year.
The maximum super co-contribution is now available where your total income (that it, your assessable income plus reportable fringe benefits) is $28,000 or less. The super co-contribution reduces by 5 cents for every dollar that your total income exceeds $28,000, and cuts out when it reaches $58,000. Previously, you were not entitled to the super co-contribution if your total income was $40,000 or more.
The Tax Office will work out your eligibility for the super co-contribution based on the income details you provide in you tax return and the contributions your superannuation fund or retirement savings account (RSA) provider have reported. They will pay your entitlement into your superannuation account.
9. SUPERANNUATION SURCHARGE ABOLISHED FROM 1 JULY 2005
This will make it more attractive for higher income earners to increase their contributions, such as through salary sacrifice.
10. SPLITTING OF SUPER CONTRIBUTIONS BETWEEN SPOUSES
The Government has reintroduced its policy of splitting of superannuation between couples, to apply from 1 July 2006. The proposal will allow personal and employer superannuation contributions made after 1 July 2006 to be split between spouses, providing a further opportunity for low income or non-working spouses to accumulate their own superannuation.
11. SIMPLIFIED SUPERANNUATION
The Treasurer released a consultation document title ‘A Plan to Simplify and Streamline Superannuation’. It contains a number of significant proposals, including:
- changes to the taxation of superannuation benefits as follows:
· benefits paid over age 60 will not be subject to tax;
· benefits paid before age 60 will be subject to taxation in largely the same manner as currently applies ( but simplified by reducing the number of components);
· reasonable benefit limits will be abolished; - age-based deduction limits will be abolished, and replaced with:
· deductible contributions up to a limit of $50,000 per person per annum will be taxed at 15%;
· undeducted contributions will be limited to $150,000 per year; - employers will receive a full deduction for all superannuation contributions they make for employees up to age 75:
- self-employed taxpayers will be able to claim a deduction for all superannuation contributions, and they will be eligible for the Government co-contribution.
12. CHOICE OF SUPERFUND
From 1/07/2005, you can now choose any super fund and have employer contributions paid in. Ring us if you want assistance with choosing a top performing fund!
* please note that the above information is to be used for general educational purposes only and is not advice. Before you take any action you should always check with your accounting, legal and/or financial advisers first.