Nathan’s 2012 Federal Budget Summary
This year’s federal budget is a real non-event. Most of the “announcements” have already been announced, and there were a few speculations that didn’t come true. Also a few earlier announcements during the past year were either not acknowedged, or won’t come into effect for at least 12 months or beyond. It is clear that the focus of this budget was simply to budget for a surplus given the political agenda. However it should be noted that our economy is one of the strongest in the world. Also that the government has done a good job given the lack of real power in parliament, and inability to get tax reform from Henry review through the pipeline. Further, They are making the most of the resources boom, more than its predecessors did.
One of the biggest disappointments in my view is the reduction in deductible/concessional contribution cap for those 50+ to $25k from 1 July 2012. This provides baby boomers with a pre 30 June tax plan to make as much upto the $50k.
Another significant measure is the ability to claim losses back from profitable years. A great idea, problem is that it is from 1 July and not retrospective. So many businesses who were already taxed, and have had losses in 2011 and possibly 2012FYs, wont benefit from this.
But whats in it for each of us as individual tax payers and business owners. Here’s Nathans summary:
Businesses
- Didn’t get a company tax rate cut
- Ability to carry back (normal revenue not capital) tax losses to offset previous years tax. This scheme will not commence until 2013FY, so that if losses incurred in 2013FY the 2012FY profit and tax could be clawed back. This is only available for companies and a maximum clawback of $1m in losses (tax benefit $300k).
- Small businesses (turnover less than $2m) increase to immediate writeoff for assets costing less than $6500, and $5000 immediate deduction for motor vehicles from 1 July 2012.
- Living Away from Home Allowance changes to reduce scope of the rules, including a maximum 12month claim period and home must be in Australia (not abroad). This will affect many overseas skilled workers working predominantly in resources sector.
- Refer changes to individuals, below
Individuals
- Tax free threshold increase from $6k to $18k – let it be noted that most taxpayers effectively got a $16k tax free threshold with the low income rebate prior to 1July2012.
- Corresponding reduction in low income rebate maximum claim reduced to $445.
- Reduction in deductible/concessional (salary sacrificed) contribution cap from $50k to $25k for those 50+ from 1 July 2012. This now means for 2013 and 2014 years that the cap will be $25k for everyone.
- Family tax benefit part A increased
- New centrelink supplement payment non-taxable to cover increase to cost of living for benefit receipients
- Schoolkids bonus to replace education tax offset, this will be a payment to parents of school age children.
- Medical expenses offset to be means tested, singles earning $84k+ and families $168k+, will have increased threshold $5kpa (up from $2k) and the rebate reduced to 10% (down from 20%).
- Mature Age Worker offset ($500) scrapped
- Other rebates consolidated into one rebate and non refundable. (ie dependant spouse, carer, etc)
- Golden Handshake ETP means tested those earning more than $180k will pay higher amount of tax.
- Non-residents tax rates changed to more reflect residents, however no tax free threshold so they will be taxed more.
Below are the details you need to know:
Superannuation
1. Deferral of higher concessional contributions cap for over 50s
Proposed start date: 1 July 2014
The Government will defer the start date of the higher concessional contributions cap for over 50s from 1 July 2012 to 1 July 2014.
Under this measure, individuals aged 50 and over with superannuation balances below $500,000 will be able to make up to $25,000 more in concessional contributions than allowed under the standard $25,000 concessional contributions cap.
It is expected that from 1 July 2014 the $25,000 cap will likely have increased to $30,000 through indexation. Accordingly, the higher concessional contributions cap for over 50s with superannuation balances below $500,000 would then commence at $55,000.
2. 30% Superannuation Contributions Tax for incomes above $300,000
Proposed start date: 1 July 2012
Individuals with incomes greater than $300,000 will have their Superannuation Contributions Tax doubled to 30% from 1 July 2012.
If an individual’s income, excluding their concessional contributions, is less than the $300,000 threshold, but the inclusion of their concessional contributions pushes them over the threshold, then only that part of the contributions in excess of the threshold will be subject to the higher contributions tax.
For example, someone with an income (excluding their concessional contributions) of $285,000 and concessional contributions of $20,000 (taking their total income to $305,000), would only have the 30% contributions tax applied to $5,000 of their contributions.
The higher contributions tax will not apply to concessional contributions which exceed the concessional contributions cap, as they are effectively taxed at the top marginal tax rate. Further, the 15% tax on earnings within superannuation (and tax exemption for assets supporting pension payments), will not be affected by this change.
Taxation
Personal Tax measures
1. Personal Tax rates
Applying from 1 July 2012 (Already legislated)
| Current 2011/12 | 2012/13 | 2015/16 | ||||
| Tax scales* | Threshold ($) | Marginal rate (%) | Threshold ($) | Marginal rate (%) | Threshold ($) | Marginal rate (%) |
| 1st rate | 6,001 | 15 | 18,201 | 19 | 19,401 | 19 |
| 2nd rate | 37,001 | 30 | 37,001 | 32.5 | 37,001 | 33 |
| 3rd rate | 80,001 | 37 | 80,001 | 37 | 80,001 | 37 |
| 4th rate | 180,001 | 45 | 180,001 | 45 | 180,001 | 45 |
| Low Income Tax Offset (LITO) | Up to $1,500 | 4withdrawal rate on income over $30,000 | Up to $445 |
1.5withdrawal rate on income over $37,000 | Up to $300 |
1withdrawal rate on income over $37,000 |
| Effective tax-free threshold** | 16,000 | 20,542 | 20,979 | |||
* Excludes Medicare levy/Flood levy (2011/12 only)
** Includes the effect of the tax-free threshold and LITO
Note that:
- The tax-free threshold will initially increase from $6,000 to $18,200 and, according to the Government, will free up to one million low-income earners from needing to lodge a tax return from 2012/13.
- The LITO will initially be reduced from $1,500 to $445.
- The combined effect of the higher statutory tax-free threshold and the LITO is that the effective tax-free threshold will initially rise to $20,542. This means that individuals will be able to earn up to $20,542 from 2012/13 without paying any net income tax.
2. Increasing Medicare levy low income threshold
Proposed start date: 1 July 2011
The Government will increase the Medicare levy low income thresholds to $19,404 (up from $18,839) for individuals and $32,743 (up from $31,789) for families, with effect from 1 July 2011. The additional amount for each dependent child or student will also increase to $3,007 (up from $2,919).
The Medicare levy threshold for single pensioners below Age Pension age will also be increased to $30,451, with effect from 1 July 2011.
3. Net medical expenses tax offset
Proposed start date: 1 July 2012
The Government will introduce a means test for the net medical expenses tax offset from 1 July 2012.
For people with adjusted taxable income above the Medicare levy surcharge thresholds ($84,000 for singles and $168,000 for couples or families in 2012/13), the threshold above which a taxpayer may claim the tax offset will be increased to $5,000 (indexed annually thereafter) and the rate of reimbursement will be reduced to 10% of eligible out of pocket expenses incurred.
People with income below the surcharge thresholds will be unaffected.
4. Consolidation of dependency offsets
Proposed start date: 1 July 2012
The Government will consolidate eight dependency tax offsets into a single, streamlined and non-refundable offset that is only available to taxpayers who maintain a dependant who is genuinely unable to work due to having a carer obligation or disability from 1 July 2012.
The offsets to be consolidated are the invalid spouse, carer spouse, housekeeper, housekeeper (with child), child-housekeeper, child-housekeeper (with child), invalid relative and parent/parent-in-law tax offsets.
The new consolidated offset will be based on the highest rate of the existing offsets it replaces, resulting in an increased entitlement for many of those eligible for this measure.
Taxpayers who are currently eligible to claim more than one offset for multiple dependants who are genuinely unable to work will still be able to do so.
5. Mature age worker tax offset phase out
Proposed start date: 1 July 2012
The Government will phase out the mature age worker tax offset from 1 July 2012 for taxpayers born on or after 1 July 1957. Access to the offset will be maintained for taxpayers who are aged 55 years or older in 2011/12.
6. Limiting the employment termination payment tax offset for golden handshakes
Proposed start date: 1 July 2012
The employment termination payment (ETP) tax offset ensures that the taxable component of an ETP up to the ETP cap amount ($175,000 in 2012/13) is taxed at a concessional rate (a maximum tax rate of 15% for those over preservation age and 30% for those under preservation age). The amount in excess of the ETP cap amount is taxed at the top marginal rate.
This tax treatment is to continue for certain ETPs relating to genuine redundancy (including to those aged 65 and over), invalidity, compensation due to an employment-related dispute, and death.
However, where the ETP is not paid due to these circumstances, for example where it is a golden handshake payment, the tax offset will from 1 July 2012 be potentially reduced.
Only that part of the ETP cap amount that takes a person’s total annual taxable income (including the ETP) to no more than $180,000 will receive the ETP tax offset and concessional tax treatment. Amounts above this $180,000 total income cap will be taxed at marginal rates with no offset.
Business tax measures
Corporate loss carry back
Proposed start date: 1 July 2012
The Government will provide new business tax relief with a loss carry-back initiative to help companies improve their cash flow.
Currently, taxpayers can only carry forward their tax losses to offset future profits and reduce future tax liabilities. This new initiative will allow companies to also carry back their losses to offset past profits and get a refund of tax previously paid on that profit.
A one year loss carry back will apply in 2012/13, where tax losses incurred in that year can be carried back and offset against tax paid in 2011/12. For 2013/14 and later years, tax losses can be carried back and offset against tax paid up to two years earlier.
Companies will be able to carry back up to $1 million of losses each year – providing a cash benefit of up to $300,000 a year. The measure will apply to revenue losses only and will be limited to a company’s franking account balance.
Non-resident tax measures
The Government announced a number of measures to adjust the personal income tax rates and thresholds that apply to non-residents’ Australian income.
Social security and aged care
Liquid Assets Waiting Period (LAWP) – increase in the amount of allowable assets
Proposed start date: 1 July 2013
From 1 July 2013, the Government is proposing to increase the amount of assets that a claimant can have before they are affected by the LAWP. Under the proposal, a recipient will be affected by LAWP if their liquid assets equal:
- $5,500 or more for an individual who is not a member of a couple and does not have a dependent child.
- $11,000 or more for an individual who is a member of a couple and/or has a dependent child.
New Income Support Supplement
Proposed start date: 20 March 2013
From 20 March 2013, recipients of the following benefits will receive an additional payment in the form of a new Income Support Supplement:
- Newstart Allowance
- Sickness Allowance
- Youth Allowance
- Austudy
- Abstudy
- Special Benefit
- Parenting Payment
- Transitional Farm Family Payment
- Exceptional Circumstances Relief Payment.
The new supplement will provide $210 per annum for singles and $175 per annum for each member of an eligible couple. The supplement will be paid in two instalments – in March and September each year.
The new Income Support Supplement is proposed to be paid to eligible recipients in addition to any payments received under the Clean Energy Household Assistance Package.
Tightening of the overseas portability rules
Proposed start date: 1 January 2013
Under the current rules, most income support and family payment recipients can travel overseas for a period of up to 13 weeks and continue to receive their benefits. If their absence is greater than 13 weeks, a benefit may be paid at a reduced rate or cancelled. From 1 January 2013, the Government proposes to reduce this period from 13 weeks to 6 weeks.
The maximum rate of Family Tax Benefit Part A will be restricted to the base rate for temporary absences greater than 6 weeks.
Tightening of Age Pension overseas portability rules
Proposed start date: 1 January 2014
Age Pension recipients either living or travelling overseas are subject to a different set of portability rules to those mentioned above.
An Age Pension recipient can be absent from Australia for an indefinite period. However, if this is greater than 26 weeks, the maximum payment rate is calculated with reference to their Australian Working Life Residence (AWLR) and usual means testing.
From 1 January 2014, an Age Pension recipient will be required to have residence of 35 years (up from 25 years) between the age of 16 and their pension age – in order to be eligible for the maximum rate of pension (subject to usual means testing).
In addition, all partnered pensioners residing overseas will be paid on their own AWLR rather than their partner’s AWLR. Grandfathering provisions will protect existing customers who are currently being paid under an international agreement.
Aged care
The Government is proposing a range of significant reforms in aged care.
1. Changes to means testing
Proposed start date: 1 July 2014
The Government is proposing a range of changes to means testing of both home care and residential aged care recipients.
1.1. Home care package recipients
Home care package recipients will be asked to pay a new means tested care fee in addition to the existing basic fee. Care recipients with total income less than the maximum income level for a full pensioner will not be asked to pay a care fee.
Care recipients with total income greater than the maximum income level for a full pensioner, but less than the maximum income level for a part pensioner will have their care fee calculated as 50% of their total income above the relevant threshold, up to an annual cap amount of $5,000 (indexed).
Care recipients with total income greater than the maximum income level for a part pensioner will have their annual care fee equal to $5,000 (indexed) plus 50% of their total income above the relevant threshold. The annual cap amount for these recipients is $10,000 (indexed) per annum.
The Government is also proposing a lifetime cap of $60,000 (indexed) on all care fees.
1.2. Residential aged care recipients
The Government proposes a single means test for people entering care after 30 June 2014. This new test will combine the current income and asset tests. Residents who can afford to will pay a means tested contribution comprising of:
- a basic fee of up to 85% of the single basic pension (currently $15,364 per annum),
- a means tested contribution to their accommodation, and
- a means tested contribution to their care (‘the care fee’).
There will be protection measures in place for people with low income or asset levels. People that do not fall into this category will be asked to pay the maximum. The maximum means tested contribution will be as follows (based on 2012 thresholds):
- 50% of income above the income threshold, plus
- 17.5% of the value of assets between $40,500 and $144,500, plus
- 1% of the value of assets between $144,500 and $353,500, plus
- 2% of the value of assets above $353,500.
A maximum cap of $25,000 per annum (indexed) and a lifetime cap of $60,000 (indexed) will apply to a resident’s contribution towards their care costs.
Contributions that residents may have made as recipients of Home Care Packages will be taken into account in calculating their lifetime care expenditure.
2. Other proposed measures
Among other proposals, the Government is also looking to develop an aged care gateway as a single point of contact to access aged care services. This includes establishing a My Aged Care website, a call centre and developing a common assessment process for accessing aged care services, and ensuring that all residents who enter care after 1 July 2014 have the choice to pay for their accommodation through a refundable lump sum payment, periodic payments, or a combination of the two. The Government also aims to increase the total number of residential places and home care packages over the next 5 years and beyond.
Families
Changes to Family Tax Benefit Part A
1. Change to age of eligibility
Proposed start date: 1 January 2013
Currently, Family Tax Benefit (FTB) Part A is generally available to families who have a dependent full-time student under 21 years of age.
The Government is proposing to limit availability of Family Tax Benefit Part A to:
- Children under 18 years of age, or
- Where a child remains in secondary school – until the end of the calendar year in which they turn 19.
Individuals who no longer qualify for FTB Part A may be eligible to receive Youth Allowance, provided they meet the usual eligibility criteria.
2. Increasing the maximum rate
Proposed start date: 1 July 2013
The Government is proposing to increase the maximum payment rate of Family Tax Benefit Part A by $300 per annum for families with one child and $600 per annum for families with two or more children.
For families receiving the base rate of Family Tax Benefit Part A, the proposed increase is $100 per annum for families with one child and $200 per annum for families with two or more children.
Replacing the Education Tax Refund with a Schoolkids Bonus
Proposed start date: 1 January 2013
Under the current rules, the Education Tax Refund (ETR) is a refundable tax offset available to families who receive Family Tax Benefit Part A.
The Government proposes abolishing the ETR and replacing it with a new Schoolkids Bonus. This will be paid to eligible recipients in two equal instalments in January and July each year.
Every family with a child at school will receive $410 per annum for each primary school student and $820 per annum for each secondary school student.
The new Schoolkids Bonus will be available to families with children enrolled and attending school who are in receipt of:
- Family Tax Benefit Part A (FTB A), or
- Other qualifying income support payments or allowances under a prescribed educational scheme that precludes the family from receiving FTB A.
- The Government also proposes that as a transitional measure, the ETR in 2011/12 will be replaced by a one-off lump sum payment to eligible families in June 2012.
Wheres my tax or BAS refund?
Frustrating isn’t it! The ATO are harrassing us to lodge our returns on time and pay our tax and BAS (GST, PAYGWH & PAYGInstalments) on time, but do they extend the same courtesy to us? Unfortunately the answer is no.
The ATO have released a number of press releases and messages to us tax agents regarding why. Here’s the official reason http://www.ato.gov.au/content/1440.htm. The ATO claim “We have a responsibility to government and the community to make sure that everyone pays the correct amount of tax under the law. We conduct programs each year where selected returns are reviewed before issuing the assessment. Tax returns that are held for review and action before release include returns identified as containing ‘high risk’ refund claims.”
Further:
“To date, four out of five reviews have resulted in a reduction in the net refund and in many instances a penalty has also been imposed. The total value of community revenue protected so far is around $85 million.
Some of the common issues identified include:
- understated income or claims for false PAYG withholding credits
- overstated or fraudulent deductions
- non-entitlement to claimed rebates or offsets – for example. spouse offset, education tax refund and refund of franking credits
- non-entitlement to a claimed Medicare levy exemption
- non-residents claiming to be residents for tax purposes
- instances of identity takeover through theft of tax file numbers and personal details.
The unanticipated processing delays for these held tax returns have caused some frustration with both taxpayers and tax agents, and we acknowledge our communication to date could have been better. We are now working to ensure those affected by these delays are kept informed of our progress and understand what they can do to help finalise their assessment.”
Is this really whats going on? What about the other thousands of ordinary taxpayers who are not high risk whose refunds are also being held? And what about the BAS and business refunds of business owners?
Its no coincidence that you’ve heard about budget cuts. Whats really going on is that the Australian Federal Government’s business, ie Tax Revenue less operating costs, is hurting. The cashflow of our government is hurting. Big time. And its us ordinary hard working Australian’s who are feeling the pinch.
So what can we do to fix this? Apart from the politics, practically we can do a couple of things.
1 Call 13 28 65. This service will advise exactly where your refund is, and what the hold up is. You can also ask to speak with a person directly to discuss your refund, plead your case, and even escalate the matter. Do this before calling your tax agent, given the ATO respond better to individuals pleading their case rather than us tax agents.
2 Call your tax agent. We can discuss if we can assist any further.
3 Prevention, and fixing the underlying problem is better than treating symptoms. Ensure you have all your records, keep great records. For business owners, our new managed online solution even has a function where we can attach copies of invoices/receipts to transactions in the system so once there, either taxpayers or their accountants can access and send straight to the ATO. Very Sharp.
Get in touch with us about how we can help sharpen your money management.
Introducing our Managed Accounting Solution – cloud and Ecommerce solution
Introdicing Morris Accounting Managed Accounting Solution (MAMAS)
Cloud and Ecommerce Solution
We are all about educating our clients and those in our community network on how to improve their business. In particular at the moment we are helping businesses get onto the latest cloud accounting, POS and eCommerce solutions that work together to create an advanced operation for a fraction of the cost of a traditional system.
For example a retailer client – sales automatically go from POS and eCommerce applications to the accounting system, drastically reducing the time and money spent on bookkeeping and compliance work.
There’s no need to spend your time or money installing software or maintaining expensive servers. All you need is a computer, smartphone or tablet and you’re ready to go — from anywhere.
See these systems in action in the video below:
http://www.youtube.com/watch?v=SNuCD9wZE_I
Whilst that’s a retail example, there are numerous solutions that work together across most businesses and we know how to make that into a solution that works for you.
The benefits that this accounting solution will bring to your business include:
- Reduction of data entry time
- Increasing efficiency and profitability
- Daily bank feeds
- Real time business accounts
- Up to date business reporting
- Complete payroll function
- Suitable for small to large businesses
- Easy integration of applications (inventory etc) and other industry specifics applications
- Bank level security
- Offsite remote backup done automatically (no more prompting for backup and forgetting where the zip file is)
- Regular updating of program/application without additional costs (as opposed to MYOB/Quickbooks asking you to upgrade your product for $XX
- Multi-user login (no more expensive multi-user programs like Premier)
- Enable your bookkeeper, accountant, finance broker access to the file (no more sending files to accountant)
- Accountant and bookkeeper can make changes to your live file, no more version conflicts etc
- And more
Features include dashboard and reports per pictures below
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- online accounting dashboard
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- online accounting
That’s just the beginning. We can give better advice when your information is up-to-date and easy for us to access. Rather than tell you how you did in the past, we’ll use real-time data to help you:
● Manage cashflow
● Reduce expenses
● Boost profits
We would be happy to discuss how this can improve your business, but more importantly hope you connect with us to keep informed of other developments in business improvement, taxation and other areas that you need to know in your business.
Don’t ever hesitate to contact our office if you have a question, we are only too happy to help. Look forward to meeting you soon. Please contact our office 1300219818, info@morrisaccounting.com. For more information and current articles checkout our latest newsletter, website or connect with us on Facebook and Twitter.
Wealth and Success – setup your own Super Fund
We are all asking questions as to whether superannuation is a good investment. The returns of the average balanced fund during the past decade was just 5.1 per cent a year.
Nathan Morris, Founding Director of Morris Accounting reminds investors “Superannuation is not an investment. It is a tax and asset protection structure for investing. Perfect for long term investment, and great low or zero tax rates in retirement.
Some Financial Planners suggest that you need $200k-$300k to setup your own fund to make it worthwhile. However a number of Morris Accounting clients have started with less. “If the client has the right attitude towards contributions, types of investments, using leverage options available, then there is a very strong case for employees and business owners alike to get a great super strategy in place” remarks Nathan.
At the moment there is also the opportunity to purchase property using superannuation funds for either business or residential investment property. Before December 2007 no leverage was available however we have an opportunity to borrow at rates similar to outside the superannuation environment. As such the rates of return are higher, and the costs in relation to setting up and maintaining a superfund based on gross assets make it worthwhile.
Want to get your superannuation back on track? Talk to Nathan and the team at Morris Accounting. Sharper Money Management. info@morrisaccounting.com.au 1300 219 818.
nathan’s view on the mining resources rent tax (MRRT)
Whats all the noise about with the mining tax? It will affect approximately 320 companies that are making great profits, most of which are headed offshore. They will be “taxed” at no more than 50% and that money will be going to the whole Australian community.
Whats more it will fund government initiatives like increased superannuation which will help to close the retirement gap that currently exists in the superannuation system between funds contributed now and funds available at retirement.
It will also give a lot more businesses a needed tax break, only 1% but nonetheless a tax break to help businesses already struggling to keep their doors open.
Labor or liberal or other, we all elect our representatives to get on with managing our national business, the national economy. Let them get on with it, especially when its for everyones benefit!
compulsory superannuation wont be enough in retirement
You need to make a SMALL EFFORT to retire comfortably. Calculations done today prove that ordinary australians can make a couple of small contributions to super to retire comfortably. Talk to us about how!
According to the ABS Nov 2011 report Australian Average earnings are $1333 a week = $69,316 a year. 9% compulsory super is $6,238.
With most people working for 40 years before retirement this should equate to super balances of around $750k. However will this be enough when you retire?
If you can live off $50k, this would require a balance of approximately $770k so it will be close, however with costs rising more than inflation, we need to put more away.
Did you know that by salary sacrificing superannuation of only $100 this would only be a tax home pay cut of approximately $70, you would save $1,560 a year in tax, and your nest egg would increase to approximately $1.3m, much more comfortable retirement.
We also helped a client put in place a property investment strategy that would increase this estimated nest egg to $4.1m and they only earn $80k a year.
Come and see the team at Morris Accounting to do the basic math about how superannuation can really make you wealthy, and retire sooner than you think!
why your business should be moving accounting online
As you know we do things differently at Morris Accounting and we are one of the few accounting firms leading the change to online accounting and bookkeeping.
Benefits of this is a great reduction in data entry, saving lots of time and money. This means that your existing bookkeeping and accounting dollars can be better utilised for uptodate reporting, enabling quick management decisions to improve the productivity, efficiency and profitability of your business.
Other benefits include
- See your cashflow in real-time. Just login anytime, anywhere. On your computer or smartphone
- Up-to-date reporting with quick links to all the original transactions.
- do pay runs and track wage expenses or connect with your payroll system.
- Manage your spending and make bill payments in bulk to creditors.
- Unlimited, around the clock email support and detailed online help center.
- Automatically import and code your bank transactions.
- Create and send invoices automatically and get paid online.
- Handle personal expenses – just review and approve receipts.
- Track stock movements and make invoicing easier with inventory items.
Youd be surprised our reasonable service levels with more services than just tax and financial statements. Most clients are opting for a $440 per month package that includes bookkeeping as well. Sounds pretty sharp? Contact us for sharper money management for your business. 1300 219 818 or info@morriasccounting.com
Making Superannuation Contributions
There are a number of ways to contribute money into superannuation, with different tax and benefit consequences. Contributions caps per person per year are:
Deductible contributions under 50years old $25,000 per year and over 50years $50,000 (with balances under $500k).
These are not eligible for government co-contribution.
Non Deductible contributions are capped at $150k per year, however you can bring forward 2 years to make a one off contribution of $450k.
Non Deductible contributions are eligible for government co-contribution if income tests are met. $1 for $1 if your assessable income is under $31,920, which reduces to no benefit once income is over $61,920.
Employees
The only way to make tax deductible contributions is via salary packaging / salary sacrifice. These contributions are known as employer concessional/deductible contributions.
Non deductible contributions can be made with your after tax net wages and these may be eligible for government co-contribution depending on your income. These contributions are known as member non-concessional/non-deductible contributions.
Business owners
You are able to make tax deductible contributions from your business if you are a sole trader or in a partnership. These contributions are called member concessional/deductible contributions.
Those businesses in companies and trusts can make contributions on behalf of business owners. These contributions are known as employer concessional/deductible contributions.
Non-Deductible contributions should be made from personal accounts, not business accounts. Depending on your income these may be eligible for government co-contribution. These contributions are known as member non-concessional/non-deductible contributions.
Ensure with your superannuation fund that you are notifying them of the correct contribution types so you are able to claim a tax deduction if application or receive the government co-contribution.
Please do not hesitate to contact our office for any further assistance you need with superannuation and taxation planning.
happy new year! what are your business resolutions?
Happy new year everyone! Did you come up with some new year business resolutions? Here’s ours
1 invest another 30mins a week on social media
2 increase sales by at least 20%
3 contact every existing client one more time per year than we did last year
4 help clients with another service during the year
5 review and implement sharper way to manage our clients money
What are yours? Please share them with us and we will help you keep accountable to those!
Businesses – take a moment to review 2011, and plan for a great 2012!
Business Owners, what a year 2011 has been.
Its time to reflect, celebrate! (for surviving at least), and plan for 2012 to be better!
You need to take time to reflect and assess the 2011 year. How do you do this? With analysing your KPIS:
- Number of customers
- Sales
- Profit
- cashflow
- business owner remuneration.
Then come up with a quick action plan of goals and items todo in 2012! Time management is key. Dale Beaumont says Cashflow follows your Calendar! So you need to plan
- Review existing products, and are there new ones you can/need to provide to customers
- Marketing these to existing clients (easier) then to new potential clients
- Sales systems to consistently deliver great conversions
- Delivery systems to consistently deliver great customer experience, and provide opportunities to give more to clients
- Efficient Administration systems to automate non-productive tasks, and easy review of key numbers to grow business.
In particular we have additional tools for clients:
- quick analysis tool to review your business performance when you get back to the office
- specific KPIs for
- easy time management system to plan your year ahead
- set and forget strategies in 2012 so you can concentrate on improving the business next year
- automation of record keeping, and dashboards for monitoring business performance
- and more!
Talk to us about how to sharpen your business for a bright future!
Join us in learning, sharing at our last info night of 2011! Free Nibbles and Drinks , book here.