JUNE 2009 NEWSLETTER
CEO UPDATE
The 30 th June is here again. We have been busy finalising your tax lodgements and preparing interim accounts and meeting with some of you for tax planning and other issues.
Some of our team members have achieved some personal milestones this year and include:
Adam and his partner Abbie safely had their first child in April
Angela has finalised her studies for membership of the National Institute of Accountants. Angela has been combining her studies, sport and full time work (as well as having a bit of a life) for quite a few years
Robert and his partner Kaarina recently announced their engagement
John and his partner Lisa also recently announced their engagement
It is with regret that I advise that Scott has left us and gone to work in the commerce field. He has found work with a business as a Finance Controller, and will be able to utilise his expertise in costing and management accounting. Scott was with us for almost 7 years. We sincerely thank him for his contribution to our business over that time and wish him well for the future.
We are always looking for new business clients, so if you have any friends or business colleagues looking for an accountant that can help them with their business, wealth creation or superannuation, please feel free to pass on our name.
We offer an obligation free first interview at no cost to any prospective client.
There were some changes to the tax and other rules in the latest budget. We have detailed some of these in the following articles. In particular, please note the changes to the Investment Allowance for small business. This has been increased to 50% and the time frame has been extended to 31 December 2009.
As always, if you have any questions about any of our articles, please give us a call.
2009 BUDGET UPDATE
INVESTMENT ALLOWANCE – changes to original proposal
The small business and general business tax break has now received royal assent and is law. Small business’ can access a 50% tax deduction for eligible assets acquired between 13 th December 2008 and 31 st December 2009. These assets need to be installed and ready for use before the 31 st December 2010 and the deduction will be available in the year that this occurs.
For example an asset which is purchased in May 2009 for $10,000 and not delivered until September 2009; the 50% bonus tax deduction of $5,000 will be available in the 2009/10 tax return.
For business’ with an annual turnover of $2 million or more:
- Assets purchased between 13/12/08 and 30/06/09 and first used before 30/06/10 – 30% tax deduction
- Assets purchased between 13/12/08 and 30/06/09 and first used between 01/07/10 and 31/12/10 – 10% tax deduction
- Assets purchased between 01/07/09 and 31/12/09 and first used before 31/12/10 – 10% tax deduction
SUPERANNUATION CHANGES
The concessional contribution caps have been reduced for the 2009/10 financial year to $25,000. The transitional contributions cap for those who are over 50 years old has been reduced from $100,000 to $50,000 for the 2009/10, 2010/11 and 2011/12 financial years. From 01/07/12, the maximum concessional cap will be $25,000 for everyone.
The non-concessional cap of $150,000 remains the same at this stage.
Concessional contributions are either employer contributions or personal contributions for which a tax deduction has been claimed.
Non concessional contributions are personal contributions for which a tax deduction is not claimed.
In the 2009/10 financial year, the minimum payment of account based pensions has been halved.
SUPERANNUATION GOVERNMENT CO-CONTRIBUTION
There will be reductions in the government co-contribution on personal contributions into superannuation. The current matching rate is 150%.
· 2009/10, 2010/11 and 2011/12 – matching rate of 100% up to a maximum of $1,000
o If contribute $1,000 of eligible monies, will receive $1,000 government contribution
· 2012/13 and 2013/14 – matching rate of 125% up to a maximum of $1,250.
o If contribute $1,000 of eligible monies, will receive $1,250 government contribution
· 2014/15 and later – matching rate of 150% up to a maximum of $1,500
o If contribute $1,000 of eligible monies, will receive $1,500 government contribution
FIRST HOME OWNERS BOOST
The first home owner’s boost of $7,000 for established homes and $14,000 for new homes has been extended until 30 th September 2009. From the 1 st October 2009 to the 31 st December 2009 this will be reduced to $3,500 for established homes and $7,000 for new homes.
PRIVATE HEALTH INSURANCE REBATE
The government announced changes to the private health insurance tax rebate and Medicare levy surcharge thresholds. Your age, marital status and income level will determine the rate of rebate you will now receive.
Contact your Private Health Fund for further information.
CLAIMING FAMILY TAX BENEFITS AFTER 30 JUNE 2009
From 1 July 2009 the Family Tax Benefit can no longer be claimed through lodging your tax return. This means that when your 2008/09 income tax return is lodged you will not receive the Family Tax Benefit as a lump sum on your income tax notice of assessment.
If you still wish to receive your Family Tax Benefit as a lump sum payment, contact the Family Assistance Office on 13 6150, advise them of your preference and provide them with an estimate of your income for the year. Specify that you do not wish to receive fortnightly payments, ensure your bank details are correct and they will then be able to make the lump sum payment electronically after your tax return has been lodged.
If you do not contact the Family Assistance Office and don’t receive fortnightly payments, the only alternative way to claim your Family Tax Benefit as a lump sum is to fill out the lengthy claim form.
As always, if you have any queries, please contact your team accountant.