1. Immediate write-off reduced for small business asset purchases
There have been some great tax concessions over the past few years for small businesses with none greater than the immediate write-off available for the purchase of new business assets. However draft legislation is in place to reduce the threshold for this concession from $6,500 to only $1,000 for business assets purchased after 1 January 2014 so don’t get caught by wily retailers trying to tell you otherwise! There is no limit to the amount of assets that you can purchase under this concession. Businesses also can no longer immediately write-off the first $5,000 of any new vehicle purchased.
2. Net medical expenses tax offset being phased out
In changes proposed in the 2013 federal budget, the government plans to phase out the net medical expenses tax offset. Only those taxpayers who claim the medical tax expenses offset in 2012/13 can continue to be eligible for 2013/14 (pending having net expenses above the relevant thresholds). The offset will continue to be available for out-of-pocket medical expenses relating to disability aids, attendant or aged care until 1 July 2019.
3. Withdrawal of excess non-concessional contributions
The 2014-15 federal budget announced that individuals will be provided with the option of withdrawing superannuation contributions in excess of the non-concessional contributions cap made from 1 July 2013 and any associated earnings, with these earnings to instead be taxed at the individual’s marginal tax rate.
4. Small, inactive super balances transferred to the ATO
Lost or inactive superannuation accounts with balances under $2000 are now transferred to the ATO, increasing to $2500 in 2016 and $3000 in 2017. Since 1 July 2013, the ATO has been paying interest on all lost super accounts reclaimed.
5. Allocated pension drawdown relief no longer available
Over the last few years, the minimum amounts required to be drawn from allocated pensions were halved as a result of superannuation fund balances getting hammered during the GFC. This relief is no longer available for the 2013-14 year and beyond with the minimum drawdown being 4% for those under age 65 increasing to 14 per cent for those aged 95 and over.
6. Research & development (R & D) tax incentive scrapped for large businesses
Large businesses with annual Australian turnover of $20 billion or more are no longer eligible for the
R&D tax incentive, but will be eligible to claim their R&D expenditure as a general deduction in their tax return.
7. Private health insurance rebate
The private health insurance rebate has no longer be paid from 1 July 2013 on any lifetime health cover loading applied to the cost of a private health insurance policy.
8. Super contribution limits lifted for those aged 60 and over
The concessional contributions limit was lifted to $35 000 for all individuals aged 60 and over. From 1 July 2014, the new limit will apply for those aged 50 and over and $30,000 for all other individuals.
ABOUT THE AUTHOR:
Dr Adrian Raftery is a senior lecturer at Deakin University and author of 101 Ways to Save Money on Your Tax – Legally! 2014-2015 edition (Wrightbooks, June 2014, AU$24.95).