Altitude

Practical tips, insights and articles to help you build the business, wealth, and lifestyle you want

Your Tax Changes Guide to the 2014/15 Financial Year

Article By Adam Hurwood | | Accounting & Tax
With 30 June now behind us, it is time to focus on what is to come in the 2014/15 financial year.  The following is a quick reference guide to key changes from 1 July 2014.

Changes for Individuals

Personal Tax Rates

Employees will see a decrease in their net wage from 1 July 2014.  While marginal income tax rates have not changed, the Medicare Levy has increased by 0.5% and taxpayers earning over $180,000 will be subject to the 2% Temporary Budget Repair Levy.

Superannuation Contributions

The concessional superannuation contribution threshold has increased from $25,000 to $30,000 for those under 50 years of age.  The threshold for over 50’s has not changed from $35,000.  If you currently have a salary sacrifice arrangement you may be able to contribute more to your fund.

The non-concessional superannuation contribution threshold has increased from $150,000 to $180,000.  Non-concessional contributions after 1 July 2014 exceeding $180,000 will trigger the “bring forward” provisions allowing $540,000 to be contributed over three financial years ($450,000 up to 30 June 2014).  If you triggered this 3 year rule prior to 30 June 2014 your cap will remain as $450,000.

Net Medical Expenses Offset

You will be unable to claim the net medical expenses offset in your 2013/14 income tax return, unless you were eligible for the offset in your 2012/13 return.  This offset provides a refund for out of pocket medical expenses.

Changes for Business

Asset Write-Off Threshold Reduced From $6,500 to $1,000

The 100% write-off threshold for the purchase of depreciating business assets is expected to decrease from $6,500 to $1,000 from 1 January 2014.  Legislation is expected to be passed.

Electronic Lodgement of 2013/14 Payment Summaries and Contractors Payments with the ATO

From 1 July 2014, the Taxable Payments Annual Report (due for lodgement by 21 July) and PAYG Payment Summary Statement (due for lodgement by 15 August) can no longer be lodged using CD-ROMs, DVDs, USBs or disks. Annual reports can be lodged online through:

-The ATO’s business portal at ato.gov.au/businessportal.  To lodge online, you will need an AUSkey. To find out more or to register for an AUSkey, go to abr.gov.au/auskey.

– Your accounting software if it is Standard Business Reporting (SBR) enabled.

– Paper copies by mail.

2014/15 PAYG Withholding Tax Tables

New tax tables to calculate PAYG Withholding on employee wages are effective from 1 July 2014 to account for the changes to personal tax rates detailed above.

Superannuation Guarantee for Employees

On 1 July 2014, the superannuation guarantee increased from 9.25% to 9.5% of employee ordinary time earnings.  It is important to ensure your payroll system is now up to date.