2011 Year end tax checklist summary

By Maddern Accountants 21/12/2011

Flood Levy - Rate Changes

  • There are no changes to the tax rates for individuals for the year commencing1st July 2011.
  • However, the flood levy will increase tax rates for higher income earners.
  • The flood levy applies to resident and non-resident individuals excluding those affected by a natural disaster and who received a government assistance payment
  • $50,000 or less will not pay the levy.
  • Between $50,001 and $100,000 – a 0.5% levy on the excess above $50,000.
  • In excess of $100,001 - $250 plus a 1.0% levy on the excess above $100,000

SMSF and Collectable

  • New rules apply for trustees of self managed super funds holding collectables and personal use assets.
  • These assets cannot be used by members without arm’s length fees being charged.

Education and Job Seeking Expenses

  • Recipients of the student Youth Allowance, Austudy and ABSTUDY, can claim deductions for expenditure incurred in relation to their course of study.
  • Recipients of New start and Youth Allowance job seeker can also claim expenses in relation to job seeking.
  • However, from 1 July 2011, the above deductions will no longer be available for this type of expenditure so those affected may consider bringing forward expenditure to secure the deductions in the 2010/11 income year.

HECS & HELP Discount Reduced

  • From 1 January 2012, the HECS discount for up front payments will reduce from 20% to 10%.
  • The discount for voluntary repayments of over $500 off HECS debt will reduce from 10% to 5%. 

Small Business Asset Write-Offs

  • From 1 July 2012, small businesses will receive immediate write-off of capital asset purchases with a value of $5,000 or less.
  • Motor vehicles purchased by small businesses after 1 July 2012 get $5,000 write-off per vehicle.

Individuals

Low income Thresholds

  • If appropriate, allocate income to individuals (not minors) with income below $16,000 or for minors $3,333 (including the low income off set).
  • From 1 July 2011, the low income off set will not be available to minors on non personal exertion income (e.g. trust distributions)

Senior Australians

  • A single senior Australian can receive $30,865 tax free and each member of a couple can receive $26,380 tax free.

Deductible Personal Super Contributions

  • Personal contributions by individuals to super funds are non deductible if more than 10% of their income is from employment.
  • Leave entitlements received on retirement are included in employment income.
  • Individuals must notify the fund that they intend to claim their personal superannuation contributions as a tax deduction.

Super Concessional Contribution Caps

  • For 2010/2011, the annual concessional contributions cap is $25,000 and $50,000 for people aged over 50.
  • From 1 July 2012, the $50,000 cap for over 50s will be limited to superannuation fund member balances of less than $500,000.

Co-Contribution Reduction

  • Non-concessional contributions up to $1,000 are matched by the Government with aco-contribution for those earning less than $31,920, phasing out at $61,920.

Businesses

Defer Income until after 1 July 2011

  • As a planning consideration, you may consider deferring income until after 1 July 2011.
  • The flood tax from 1 July 2011 may reduce the above timing advantage.
  • Cash flow is also a crucial consideration

Non-Commercial Business Losses - Losses for High Net Worth Individuals

  • From 1 July 2009, business losses by individuals are quarantined where the individual’s adjusted taxable income is $250,000 or more, unless a determination is received from the Commissioner of Taxation.

Super Guarantee and Contractors

  • Under the SGC rules, employers are required to make contributions for eligible employees.
  • Employees include independent contractors who are engaged under a contract primarily for the provisionof labour.
  • Where you engage independent contractors, you should determine whether the individuals are employees for SGC purposes.
  • Clauses in contracts which push the SGC obligations down to the contractors are not effective.

Super Guarantee and Hours of Work

  • SGC contributions are generally based on an employee’s ordinary hoursof work.
  • SGC contributions do not apply to overtime payments.
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