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INDIVIDUALS – Tax Time Changes 2013

Exemption limit and tax rates

The exemption limit for individuals has been increased from $6,000 to $18,200. The taxation rates have also been changed. Tax will be charged at – from $18,201 to $37,000 @ 19%, from $37,001 to $80,000 @ 32.5%, from $80,001 – $180,000 @ 37% and above $180,000 @ 45%. There will be medicare levy over and above these rates @ 1.5%.

Low income tax offset reduced

The low income tax offset has been reduced to $445.

Changes in private health insurance rebate

From 1 July 2012, the private health insurance rebate (PHIR) and the Medical levy surcharge are
income tested against three income tier thresholds.

Changes to net medical expenses tax offset

From 1 July 2012, the net medical expenses tax offset (NMETO) will be means tested such that a higher threshold for out-of-pocket medical expenses and a lower tax offset rate will apply to higher income earners.

Additional information for capital gains

In the capital gains taxation, additional information is now being sought by the ATO regarding the application of exemption or rollover. It is presumed this information might be used by the ATO to monitor such matters as whether a replacement asset has been acquired within the relevant time period, and whether the retirement exemption lifetime limit has been exhausted.

Government’s superannuation contribution for low-income earners

Low income earners deriving adjusted taxable income up to $37,000 will be eligible for $500 contribution from the government.

Mature age worker tax offset

From 1 July 2012, there is a new age eligibility requirement that also applies. For the 2012-13 income year onwards, a taxpayer must have been born before 1 July 1957 to qualify for the MAWTO

Dependant spouse tax offset

From 1 July 2012, a dependant spouse must be born before 1 July 1952 to be eligible for the dependant spouse tax offset. This further restricts eligibility for the dependant spouse tax offset.

Financial institution details now mandatory

Giving of information relating to bank account is now mandatory meaning the ATO does not intend to issue cheques for refunds.

SMALL BUSINESSES – 2013 Tax Time Changes

Faster write off of depreciable assets

All depreciable assets up to $6,500 will be eligible to write off immediately. All Other assets will be written off @ 30% (15% in first year). However, for motor vehicles, the first $5,000 can be written off immediately.

Simplified depreciation pools

To simplify and streamline depreciation arrangement for small business, the long life small business pool and the general small business pool have been consolidated into a single pool to be written off at one rate.

Company loss carry-back

From 1 July 2012, corporate tax entities that have paid tax in the past, but are now in a tax loss position, will be allowed to carry their loss back to those past years to obtain a refund of some of the
tax they previously paid.

Abolition of entrepreneurs tax offset

The entrepreneurs tax offset (ETO) no longer applies from 1 July 2012.

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