2012-13-key-tax-changes

The tax-free threshold increases to $18,200 from this year.

The option of making a standard deduction of $500 scrapped – In this year’s May Budget the federal government decided not to introduce the standard deduction.

The Education Tax Refund will be replaced with the new Schoolkids Bonus. $410 for each child in primary school and $820 for each child in high school.

Superannuation: From 1 July 2012 all taxpayers, regardless of age, will have their concessional contributions capped at $25,000. Accordingly, the 2011–12 financial year is the last year that an individual taxpayer aged 50 or over may make eligible superannuation concessional contributions of up to $50,000 under the current rules.

The Australian Government’s superannuation co-contribution limit will also drop from $1000 to $500 from 1 July 2012. This cut will adversely affect many low-income earners, who should consider making after-tax contributions to obtain the maximum superannuation co-contribution before the window closes on 1 July 2012.

Medical expenses: The medical expenses offset will be means tested for those whose income exceeds the Medicare levy surcharge next year. They will only be able to claim a 10 per cent tax refund for net medical expenses exceeding $5000 in the 2012–13 financial year. Hence, where practicable, it may be best to bring forward eligible medical expenses before 30 June.

Claim the entrepreneur’s tax offset: The 2011–12 is the final financial year in which eligible small business entities can claim the entrepreneur’s tax offset, which is equal to 25 per cent of the income tax payable on the business's net income.