Robert Barbariol : Chartered AccountantChartered 

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Tax-Free Threshold and Tax Rates


The tax-free threshold for 2012/13 for Australian resident individuals is $18,200 (up from $6,000). When combined with the Low Income Tax Offset, residents pay no tax on incomes below $20,542.


Higher thresholds apply to senior Australians and pensioners. For incomes above the thresholds, tax rates are slightly lower.


Non-resident individuals for the whole of 2012/13 do not get a tax-free threshold.


Part-year residents get a partial threshold which is more generous than in previous years.


Family discretionary trusts may need to make a family trust election if the trust has un-recouped losses, or has beneficiaries whose total franking credits for the year may exceed $5,000.


Be sceptical of year-end tax shelter schemes. You should not enter a scheme without advice regarding both its tax consequences and commercial viability.


Entrepreneurs Tax Offset Abolished


The Entrepreneurs Tax Offset provided a 25% reduction in income tax for small businesses with annual turnover less than $75,000.


This has been removed from the 2012/13 income year onwards. If you benefited from this tax offset in previous years, you may have an increased tax liability in 2012/13.


Means Testing of Private Health insurance Rebate & Medicare Levy Surcharge


Tiered rates of private health insurance rebates now apply, based on your age and income.


If you claim the rebate as a Premium reduction you are (or were) required to nominate your rate when renewing your policy. If you quoted the wrong rate, you will have an amount Payable or refundable on your 2012-13 tax assessment.


If you don't hold private health insurance, tiered rates of Medicare levy surcharge apply based on your income


Income Tax Changes - Small Businesses


Depreciation and Low Cost Asset Deductions


There are significant changes to the timing of deductions for Plant & equipment.


Items costing less than $6,500 excluding GST are now immediately deductible (up from $1000).


Motor vehicles costing $6,500 or more qualify for an upfront deduction of $5,000 + 15% of the remaining amount.


Income Tax Changes - Individuals


Multiple Changes to Personal Tax Offsets


A major restructure of personal tax offsets takes effect in 2012/13. If you have previously benefited from any of the following, you may have an increased tax liability for 2O12/13


Net Medical Expenses Tax Offset - For incomes above $84,000 (singles) or $168,000 (couples and families), the offset is 10% of out-of-Pocket expenses (down from 20%) and the threshold is now $5,000.


The Mature Age Worker tax offset is now restricted to taxpayers born before 1 July 1957, there is no change if you were already eligible for the tax offset in the 2011-12 or earlier years.


The spouse Tax Offset is now limited to spouses born before 1 July 1952 previously 1 July 1971).


A new income test applies to the Employment Termination Payments Tax offset.




Low income earners (adjusted taxable income below $37,000 may benefit from the Low Income Super Contribution (LISC).

This is a government superannuation payment equal to 15% of deductible contributions made by you or your employer, up to a maximum of $500. The LISC is additional to the existing Super co-contribution. The co-contribution is now 50% of personal non-deductible contributions, up to a maximum of $500. The maximum eligible income has been reduced.


High income earners (adjusted taxable income above $300,000) will have the tax concession on contributions reduced from 30% to 15%. The government is still deciding whether the additional 15% tax will be collected from the individual or the superannuation fund.


If you have inadvertently made super contributions in excess of the maximum deductible amount (generally $25,000), you may be able to take the excess back out of your super fund. Multiple conditions apply, this should not be considered without advice.


The minimum pension Payment for account based pensions in 2012-13 is again reduced by 25%.


Companies - Loss Carry-Back


Companies that have paid tax in the past, that incur a loss in the 2012-13 income year, may be able to obtain a refund of some of the tax previously paid.


Multiple conditions apply.


Dad and Partner Pay


Dad & Partner Pay (DAPP) complements the Paid Parental Leave scheme. It is a direct payment through Centrelink to eligible fathers and partners providing care for children born or adopted after 1 January 2013. Eligible fathers and partners can claim up to two weeks DAPP at the national minimum wage.


Removal of Capital Gains Discount for Non-Residents


The government will remove eligibility for the 50% discount on capital gains earned after 8 May 2012 by non-resident individuals and trusts on taxable Australian property, such as real estate and mining assets. You can preserve the discount for unrealised capital gains accrued up to 8 May 2012, if You have the asset valued as at that time'