2008/09 Key Tax Changes

End of financial year tax help & tax tips - 2008/09 key tax changes

• Changes to employee share scheme election requirements – $1,000 exemption applies if an election is made to be taxed upfront.

• Increased Medicare Levy Surcharge threshold for singles and members of a family has been increased to $70,000 and $140,000.

• Temporary Tax Break for business – Businesses may be able to claim a tax deduction of 50%, 30% or 10% of the cost of an eligible new tangible depreciating asset, acquired and first used or installed ready for use between specified periods under new law passed by Parliament in May.

• Tax Calender is available for small business with turnovers below $2 million. This can be personalised for each individual circumstances. To download visit www.ato.gov.au/TaxCalendar

• Education Tax Refund – Clients can claim 50% of eligible expenses up to $750 for each eligible child in primary school and $1,500 for each eligible child in secondary school or for an independent student.

• New HECS-HELP Benefit for graduates.

• Superannuation tax concessions cut for both high and low income earners. From July 1, tax deductible super contributions will be halved to $50,000 for those over 50 and $25,000 for younger workers.

• The Government maximum super co-contribution reduced from $1,500 to $1,000.

• Same-Sex Relationships and Tax – From 1 July 2009, all couples and families will be treated the same way for tax purposes, regardless of gender.

• A change to Super for same-sex couples and their children – The law has been changed for regulated super funds to recognise same-sex relationships.

• Tax-free super for people with a terminal medical condition. The fund is not required to issue a payment summary with the benefit and not required to include the amount in tax return for 30 June 2009 tax return.

• Foreign deductions and losses after 1 July 2008 – Foreign losses are no longer quarantined from domestic income or from other foreign losses of a different class.

• Lump sum claim of Family Tax Benefit is no longer paid through lodging annual tax return. Claim FTB through the Family Assistance Office for the year starting 1 July 2008 and future years.

• First Home Saver Accounts – Clients do not pay tax on earnings on this account. The government will pay a 17% contribution on up to $5,000 of personal FHSA contributions made each year.