Range Tax Payable
$0 – 6,000 Nil
$6,001 – 34,000 15% + 1.5% Medicare Levy
$34,001 – 80,000 $4,200 + 30% + 1.5% Medicare Levy
$80,00, - 180,000 $18,000 + 40% + 1.5% Medicare Levy
$180,000 + $58,000 + 45% + 1.5% Medicare Levy
Low Income Rebate for 2008-09
The Low Income rebate has been increased to $1,200 and now shades out in the taxable income range of $30,000 to $60,000. As a result of this new threshold it means that minors can earn up to $2,668 per annum tax free.
Employment Termination Payments for 2008-09
Age Component Tax Payable
Under 55 (a) Tax Free Nil
(b) Taxable up to $1million, 31.5% tax
Above $1 million, excess @ 46.5%
55 and over (a) Tax Free Nil
(b) Taxable First $145,000 @ 16.5% tax
From $145,000 and $1 million, 31.5%
Above $1 million, excess @ 46.5%
(a) Government Co-contributions
The Government will contribute 1.5 times your personal contribution, up to a maximum of $1,500, if your adjusted assessable income is <$30,342.
The Government contribution is progressively reduced on assessable income greater than $30,342 and phased out to $Nil when your income reaches $60,342.
(b) Contribution Limits
(i) Concessional (ie; Deductible)
Age at 30/6/09 Cap Amount
< 50 years $50,000*
50+years $100,000
* This amount will be indexed by movements in Award Wages in $5,000 increments
(ii) Non Concessional
Age at 1/7/2008 Cap Amount
<65 years $150,000 or a 3 year limit of $450,000
65 - <75 years $150,000
75+ years No contributions can be made
Note: Above age 65 years and <75 years, a fund member will need to be gainfully employed for at least 40 hours over 30 consecutive days during the financial year to be able to make contributions.
First Home Saver Accounts (FHSA)
Below is a summary of the FHSA as provided by the National Tax and Accountants Association
· Earnings on FHSA’s are taxed at 15% but it is the financial institution and not the taxpayer that pays the tax;
· If a taxpayer decides not to go ahead with buying or building their first home, they must contribute the funds deposited to the FHSA into their superannuation fund.
· The FHSA must be an individual account, not a join account, even if the taxpayer is buying a home jointly.
· Taxpayers can only have one FHSA
· Contributions must be from after-tax income and money contributed must remain in the FHSA.
· Taxpayers are required to make personal contributions of at least $1,000 for each of four financial years (not necessarily consecutive) before they can withdraw their money.
· There is a maximum cap so that contributions cannot be made once the account balance hits $75,000 for 2008/09 (to be indexed).
· Other people can contribute to the account.
· The government will contribute 17% of personal contributions up to a maximum of $850 for the 2008/09 financial year after:
- the taxpayer lodges their tax return and
- the account provider has reported the personal contributions to the ATO
· When the taxpayer is ready to buy their first home, they must
- Withdraw the entire balance of the account and close it. The withdrawal is tax-free
- Use those funds to make a payment towards buying or building their first home within six months of withdrawing the funds.
- Meet the occupancy rule. That is, they need to live in the home for at least six months as their main residence. The six month period must start within 12 months of purchase settlement day, or building completion date.
· When a taxpayer reaches the age of 65 the provider must close the account. The funds can be paid directly to the taxpayer or, if they don’t advise their account provided before their birthday, they may transfer the funds into the taxpayer’s super.
ATO’s Compliance Program: 2008/09
The Tax Commissioner, Michael D’Ascenzo, released the ATO’s Compliance program for 2008/09 in September 2008 which lets the community know where they will focus their attention and the action they will take in the coming year, “so people know which areas of risk they should avoid”
The ATO will focus on (among other things):
- Income tax;
- Tax havens
- Dodgy tax schemes;
- Wealthy individuals; and
- The cash economy.
Their priorities for individual taxpayers include:
· A focus on capital gains from the sale of property, shares and other assets;
· Expanding their review of the activities of senior executives and directors; and
· Monitoring work-related expense claims, particularly out of pocket claims for self-education, car and travel expenses.
More industry benchmarks, data matching and cash economy audits
The commissioner also advised that the ATO will:
· Work with more industries to develop benchmarks (these benchmarks allow taxpayers to compare their performance to the rest of their industry and check that their tax records reflect their business practices);
· Increase their data matching to more effectively identify and target people who may have under-reported income or over-claimed expenses; and
Undertake more than 5,000 cash economy audits or reviews