With the New Year well and truly begun I thought it was important to remind you of tax changes which came into place on 1 July 2014.
For Individuals the changes are as follows:
• Temporary Budget Repair Levy adds 2% to the tax rate for every dollar of a taxpayer’s annual taxable income over $180,000.
An example of what this means for Individuals:
Taxable income of $180,000 or below NO LEVY PAYABLE
Taxable income of $200,000 Pay 2% of $20,000 i.e. $400 levy
Taxable income of $300,000 Pay 2% of $120,000 i.e. $2,400 levy
• The Medicare Levy has increased from 1.5% to 2%.
• Employer Superannuation Guarantee contributions have increased from 9.25% to 9.5%.
• Aged care reforms introduce new assets tests for resident’s accommodation and care fees.
For Superannuation and Self-Managed Superannuation Funds
• New Self-Managed Superannuation Fund trustee penalties. From 1 July 2014 the ATO has greater powers to enforce the superannuation rules by levying financial penalties directly on trustees.
• Contribution Caps have changed. From 1 July 2014, the concessional contribution cap for taxpayers up to the age of 50 is $30,000. And for those 50 and above, the cap is $35,000.
• Non-concessional cap changes. The non-concessional contributions cap from 1 July 2014 is $180,000 (up from $150,000) or $540,000 over 3 years.
• Insurance inside an SMSF. From 1 July 2014, new insurance policies within a SMSF must be consistent with the death, terminal illness, and permanent and temporary incapacity conditions of release in the Superannuation Industry (Supervision) Act.
If you are unsure how any of these changes may affect you please feel free to contact the office. It is easier for us to provide advice before you do something as opposed to after.