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2014 12.TAX NEWS.December 2014

Urban Reptiles

Published on December 3, 2014

Medical Expense Offset Medical expenses offset threshold has been increased for the 2014/2015 year. From 1/07/14 single taxpayers with an adjusted taxable income of more than $90,000 and couples or families with an adjusted taxable income of $180,000 or more, the threshold is increased to $5,100 and the offset is reduced to 10% of the expenditure in excess of $5,100. The lower threshold figure for 2013/14 was $2,162. Note also that you can only claim a medical expenses offset in 2013/14 and 2014/15, if you claimed the offset in 2012/13 and 2013/14. The offset will continue to be available for taxpayers with out-of-pocket medical expenses relating to disability aids, attendant care or aged care expenses until 1 July 2019. Dependant Spouse Tax Offset Abolished The government has abolished the dependant spouse tax offset for all taxpayers with a dependant spouse, from 1/07/14. Reporting requirements for contractors in the building & construction industry. Businesses in the construction and building industry are required to report taxable payments made to contractors from 1/07/12. For more details in relation to your obligations under this system log on to:- Reporting of actual superannuation contributions on employee payslips. It is now compulsory for employers to show actual superannuation contributions paid to the fund on behalf of the employee, on employee payslips. This means that employees will know each pay period what superannuation amounts have been paid to the fund and if they have not been paid. Health Insurance Rebate Private health insurance rebate and the Medicare Levy Surcharge are now income tested against three income tier thresholds. For the 2014/15 tax year, for single taxpayers earning below $90,000 and families earning below $180,000, there is a small reduction in the % rebate claim from 30% down to 29.04% for taxpayers under 65, from 35% to 33.88% for taxpayers aged 65 to 69 and from 40% to 38.72% for taxpayers aged over 70. If your income is above these amounts see table below. Tier 1 Tier 2 Tier 3 Singles $90K to $105K $105K to $140K > $140K Families $180K to $210K $210K to $280K > $280K Rebate Under 65 19.36% 9.68% 0% 65-69 24.2% 14.52% 0% 70 & Over 29.04% 19.36% 0% Medicare Levy Surcharge Rates 1% 1.25% 1.50% Superannuation The maximum amount that can be claimed as a tax deduction (concessional contributions) for 2014/15 has been increased to $30,000 and for persons aged 49 years old or over on 30 June 2014 the limit is $35,000 . Un-deducted or non-concessional cap has increased to $180,000 per year from 1/07/14. For high income earners who have an adjusted taxable income over $300K, their concessional super contributions will be taxed at 30% in the fund on the amount that their ATI exceeds $300K. Note salary sacrifice and SGC contributions that exceed the concessional caps will incur an additional 32% tax payable. For Super Pension funds paying an account based pension stream or annuity income, the minimum pension amounts that must be paid to ensure the income of the fund is exempt from tax for 2014/15 are shown in the table below. The reduction in the statutory percentage amounts that was introduced following the GFC no longer applies. AGE percentage (%) Under 65 4% 65 - 74 5% 75 - 79 6% 80 - 84 7% 85 - 89 9% 90 - 94 11% 95 14%