Budget update 2012-13

The special 2012-13 budget edition of our monthly newsletter is available now for download for clients and website subscribers of Beyond Accountancy.

To get your copy of the budget update please subscribe to our newsletter using the form on this website.

Headlines:

• Super contributions limit cut for people over 50
• Education tax refund payment to be replaced with "Schoolkids Bonus"
• Bad news for business with corporate tax rate cancelled
• Personal tax initiatives scrapped
• Changes to family tax benefit
• Co-contribution to be cut in half

What do I do about it?

The newsletter will give you the facts.  But what does it mean for you?  Here are some tips for various groups.

Businesses buying new assets: Currently you can write off assets up to $1,000.  From next July that increases to $6,500.  Also, cars purchased from July onwards get an immediate $5,000 write off (new or second hand).  So you might want to delay non-urgent purchases until July for tax reasons.

Over 50s salary sacrificing: If you are over 50 this is the last year you will have a $50,000 concessional contributions cap until the 2014-15 financial year.  This means that it is now your last chance  for 3 years to put large amounts of pre-tax salary into super. From 1 July 2012 the limite will be $25,000 for everybody, regardless of age.

Last change for a co-contribution: The co-contribution is set to drop froma $1 to $1 ratio down to a $0.50:$1 ratio.  After 30 June 2012 the maximum contribution will be $500, not $1,000.  If your adjusted income is under $31,980 the government will match the $1,000 of personal super contributions you make before the end of financial year.  Incomes between $31,980 and $61,980 will get a proportionate contribuion.

High income earners: Nothing gets votes like taxing "the rich" and giving bigger payments to "battlers".  If you're a high income earner get set for more expensive health insurance and higher penalties for opting out of health insurance.  Plus, your super contributions tax will double from 15% to 30% if your income is over $300,000.  The main action to take is to look at getting health insurance as soon as possible if you don't have it already.  Or maybe move to New Zealand where the tax rates are much lower.

SMSF trustees: time to audit your auditor! The ATO is continuing to get tough on Self Managed Super Fund (SMSF) auditors to ensure auditors are competent and independent.  This may put pressure on accountants who audit their own super funds. Beyond Accountancy does not audit its own funds and uses experienced, highly skilled auditors to ensure a high level of quality is maintained.

Simpler replacement for education tax refund: The school kids bonus will provide a similar payment to the current education tax refund.  So what do you need to do to claim it?  The answer is nothing!*  It is an automatic payment, meaning less paperwork and less hassle.  Don't forget that if you forgot to claim education tax refund or family tax benefit in a previous year you can still go back and make a retrospective claim.  Both can now be claimed online, and we can help you lodge the necessary forms.

* note: if Centrelink don't know your child has started Prep they may need to be told this in order for you to get the automatic payments which start this June.

Ask a question: Clients and subscribers: if you have a specific question about the budget changes and how they effect you, contact us at info@beyondaccountancy.com.au

More strategies

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