Happy 2013-14 Financial New Year. Fewer things have changed since 1 July 2013 than they did this time last year (with the Clean Energy Act changes to tax law), so this looks set to be a year of consolidating those changes. We hope this will also be a year of financial consolidation for all our clients, to better weather the challenging times we're in.
Do you actually need to lodge a 2012-13 tax return?
From 1 July 2012 the tax-free threshold was increased from $6,000 to $18,200. This means that many taxpayers who had to lodge tax returns in previous years may not have earned enough to lodge a 2012-13 tax return. Sometimes, though, even though you may not have earned income over the tax-free threshold you may still be required to lodge.
Here are some of the more common reasons you might still have to lodge a 2012-13 return even though you earned less than $18,200:
- You had tax withheld from payments you received during the year.
- You had reportable fringe benefits on your PAYG Payment Summary.
- You had reportable employer superannuation contributions on your PAYG Payment Summary.
- You made a loss, or can claim a loss made in a previous year.
- You are entitled to the Private Health Insurance Rebate.
As always, if you're unsure if you need to lodge please contact us.
Peregian Beach near our office
Peregian Accounting -
Phone: 61 7 5448 1218
Fax: 61 7 5448 1221
Upcoming Due Dates
- July 21 : Jun 2013 monthly BAS due for lodging and paying (only for those on monthly reporting cycles).
- July 28 : Jun 2013 quarterly BAS due for lodging and paying (if lodging via paper form).
- July 28 : Jun 2013 quarter superannuation obligations due for payment.
- August 14 : PAYG withholding payment summary annual report due for employers who have no tax agent or BAS agent preparing the report.
- August 21 : Jul 2013 monthly BAS due for lodging and paying (only for those on monthly reporting cycles).
- August 25 : Jun 2013 quarterly BAS due for lodging and paying (if lodging via tax agent or BAS agent).
- August 25 : PAYG withholding payment summary annual report due for employers who have a tax agent or BAS agent preparing the report.
The National Disability Insurance Scheme
From 1 July 2013, DisabilityCare Australia (aka the National Disability Insurance Scheme) will start becoming available for eligible people with a disability (hereafter called "participants") in different locations of Australia. As a participant, you will have choice and control in creating personalised plans and accessing flexible support with the help of local area co-ordinators.
You may also receive payments from DisabilityCare Australia. These payments will be exempt from income tax. You will also be exempt from income tax on any DisabilityCare amounts provided in your name to others on your behalf, such as care providers. You cannot, however, claim deductions, depreciation of capital assets or certain other capital expenditure if these purchases were funded using tax-exempt DisabilityCare income.
For more information, visit DisabilityCare Australia's website: www.disabilitycareaustralia.gov.au
Continuing Changes to Super: What are the rules now?
Superannuation always seems to be in a state of flux. As soon as we get used to one set of rules they change again. Even if you don't think you have the money to worry about your super right now, though, you should still keep up to date with the rules. In fact, with less surplus to devote to super you should make sure that whatever you can contribute is being used most effectively.
Compulsory super contributions (for employees, employers and some contractors)
Things that have changed from 1 July 2013:
- The rate of compulsory super payments from employers has increased. From July 1 2013, your employer should be contributing a minimum of 9.25% of your gross wages once you earn over $450 in a calendar month. For example, if you earn $600 before tax in July 2013 then your employer should contribute $55.50 to your nominated super fund.
- There is no longer an upper age limit for payment of compulsory super from your employer. Previously, if you were aged 70 years or over your employer did not have to contribute compulsory super payments to your super fund, but now all employees over 18 who earn enough wages must have super paid by their employer.
- Although not technically a 2013-14 change, if you earned less than $37,000 in 2012-13 (at least 10% of which was from business or employment) you may receive a bonus super payment from the Government some time around September 2013. This was actually a change that came in on 1 July 2012 to boost the super funds of low-income earners, but the first payments will start arriving into super funds in the next few months (as long as you have lodged your tax return and given your Tax File Number to your super fund). More information
- Super funds will start providing a new type of super account called "MySuper". It used to be the case that if you did not nominate a super fund to your employer, they could use a default fund of their choice but between now and December 2013 MySuper accounts will be phased in, providing lower fees, simpler features and investment options.
- Even if you are a contractor to a business, if you are in an employee-like relationship with the business you're contracting to they may still be obliged to contribute towards your super. Use the ATO's employee/contractor decision tool to work out whether you are owed super as a contractor.
- Your employer may pay more than the minimum 9.25% superannuation rate, but if this is from your before-tax income and at your request (eg a salary sacrificing arrangement) the extra super may have to be declared on your PAYG Payment Summary and may affect your payment rates for government benefits.
Personal super contributions, self-managed super and pensions
Things that have changed from 1 July 2013:
- The concessional contributions cap for over-60s has increased from $25,000 to $35,000. The Government had previously intended to introduce a $50,000 concessional cap for over-50s with super balances less than $500,000 but this has been cancelled, and they will instead extend the $35,000 cap to all over-50s from 1 July 2014, regardless of their super balance.
- SMSF trustees must now confirm that the auditor they appoint is registered with ASIC, which can be done by searching the ASIC website using the auditor's SMSF Auditor Number (SAN). SMSF trustees must include the SAN in the SMSF's annual returns.
- New administrative penalties apply for SMSFs, and the power of the ATO to force rectification or mandate education if trustees have contravened the SMSF laws has been expanded. The ATO supervisory levy has also increased to $259.
- Pension drawdown relief will continue, such that members of account-based pensions only have to draw-down 75% of the normal minimum pension rate.
- Not technically a 2013-14 change, but from 1 July 2012 the matching rate and income limit for super co-contribution were both reduced. You must have earned less than $46,920 in 2012-13 to receive the co-contribution and the matching rate was 50% (up to a maximum payable amount of $500 for a $1,000 personal contribution). These changes will start to be noticeable in super fund balances in the next few months once 2012-13 tax returns are lodged.
- Recent changes to legislation mean that you may earn up to $48,516 in 2013-14 and still possibly be eligible for the co-contribution but the matching rate will still be 50%.
- The non-concessional contributions cap remains unchanged at $150,000 per year, or $450,000 over 3 years.
- The stricter rules for SMSFs investing in collectables and personal use assets have been in force for all new investments since 1 July 2011, and for assets purchased prior to this date trustees have until 1 July 2016 to ensure collectables and personal use assets comply with the new standards or are disposed of. More information
- Since 1 July 2012, SMSF trustees must now regularly review their fund's investment strategy, and consider insurance for members as part of this strategy. Trustees should document this review with minutes of meetings.