Some important tax changes from 1st July
Some important tax changes from 1st July 2014
Medicare Levy
The Medicare levy rises from 1.5% to 2%.
2% Deficit Levy
The new “Deficit Levy” (tax on high income earners) applies to taxable income in excess of $180,000.
Tax rates for the 2014/15 income year are as follows:
|
Taxable Income $ |
Taxable Payable $ |
|
0 – 18,200 |
Nil |
|
18,201 – 37,000 |
Nil + 19% of excess over $18,200 |
|
37,001 – 80,000 |
$3,572 + 32.5% of excess over $37,000 |
|
80,001 – 180,000 |
$17,547 + 37% of excess over $80,000 |
|
180,001+ |
$54,547 + 47% of excess over $180,000 |
The above rates do not include the Medicare levy of 2%.
SGC
The compulsory employer paid super contribution rises from 9.25% to 9.5%.
Superannuation contribution caps
The general concessional contributions cap rises from $25,000 to $30,000. For individuals aged 49 or over on 30 June 2014, the concessional contributions cap is $35,000.
The non-concessional cap is increased from $150,000 to $180,000. That means the 3-year bring forward rule increases from $450,000 to $540,000.
PAYG instalments threshold increases from 1 July 2014
The ATO has announced changes to the pay as you go (PAYG) instalments entry and exit thresholds.
From 1 July 2014, PAYG instalment thresholds have increased, which means that some taxpayers no longer need to pay instalments.
The entry and exit thresholds for:
– business or investment income will increase from $2,000 to $4,000;
– adjusted balance of assessment will increase from $500 to $1,000; and
– notional tax will increase from $250 to $500.
There will no longer be a requirement for entities registered for GST to remain in the PAYG instalment system, if they have a zero instalment rate.
The ATO says that if taxpayers no longer meet the entry rules, they will be automatically exited from the PAYG instalments system. It will send a letter to notify tax agents of a client’s automatic withdrawal.
If they want to continue to pay instalments towards their end of year tax liability, they can voluntarily re-enter the PAYG instalment system.
Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.