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Changes and new additions to tax law cross our desks all the time.
Some changes are wide-sweeping government programs or benefits and some are minor changes introduced to obscure sections of corporate or individual tax law that would impact only a few people but in significant ways.
Regardless of the type of modification that is introduced, we see it as a core part of our business to keep you informed about all the tax changes that come along and help you understand exactly how these changes may apply to you, your family and your interests.
Every couple of months, we'll email you a free copy of TAXTalk, an e-bulletin that summarizes all of the recently announced tax modifications which will be presented to you in easy-to-understand language. Furthermore, if you are a client you can occasionally expect to receive a personalized note or phone call from us regarding a specific tax change that may be particularly relevant to your situation.
Here is the latest edition of TAXTalk:
Good morning,
Welcome to the May/June issue of TaxTalk.
As we approach another financial year-end many of you may be thinking about the past year and the deductions that you may be able to claim against your business or personal income when you file your taxes this year. The articles below highlight some specific considerations in this regard. The first article concerns the deductibility of hiring your spouse to perform duties in relation to an investment property. Do you (or anyone you know) fall into this category?
Secondly, there may be some broad changes to how work-related expenses are deducted making it simpler for everyone involved, and our third article focuses on the superannuation cap for people 50 and older. How might these changes affect you or your family?
Finally, the recently-released Government budget didn’t make huge waves this year, but there were some changes which might have a direct impact on your personal or professional financial situation.
Here are the TaxTalk feature articles this quarter. We hope you enjoy them.
No Deduction for Payments by a Husband to Wife
A case before the Tribunal considered the deductibility of salary and employee costs paid by a husband to his wife. The husband owned a rental property and employed his wife to assist with paperwork and other issues associated with the property. The wife visited the property on a number of occasions during the year for maintenance and cleaning. She also did some gardening and supervised the work of tradesmen. The wife kept property records including, signing cheques and paying bills.
The husband claimed a deduction for various amounts paid to his wife, including $25,000 in wages, fringe benefits and allowances, and $35,000 paid into her super fund as an employer contribution. The Commissioner disallowed the deduction. On appeal, the Tribunal also denied him a deduction for these payments. Find out why HERE.
Standard Deductions for Work Related Expenses
The Government has released a discussion paper which considers the proposal to introduce a standard deduction for individuals, for work related expenses and for the cost of managing the individual's tax affairs. Currently, individuals who claim deductions for work related expenses or for the costs of managing their tax affairs must determine whether their expenditure is deductible (based on legislation, court decisions and Tax Office releases) and be subject to applicable substantiation rules.
It is proposed a standard claim of $500 will be available in the 2013 year and $1,000 for later years. Where the individual incurs actual expenditure in excess of the standard amount, they can claim the actual amount incurred, but they will then be subject to the usual deductibility and substantiation rules. To find out how you might be affected, read more HERE.
$50,000 Superannuation Cap for 50's and Over
Treasury has released a consultation paper allowing individuals aged 50 and over with total superannuation balances below $500,000, to continue making super contributions of up to $50,000 per year beyond 30 June 2012. This $500,000 threshold will not be indexed.
Currently, individuals aged 50 and over can make concessional superannuation contributions of up to $50,000 per year without incurring an excess concessional contributions tax. The $50,000 cap is due to expire from 1 July 2012 when the contributions cap for persons aged 50 and over reduces to $25,000 per year. To read more about whether you might be eligible, click HERE.
Federal Budget 2011-2012
The recently announced Federal Budget was widely anticipated to be an interesting one in that the Federal Government is attempting to get back to surplus within two years. Find out exactly what changes were unveiled and how they might impact you and your family. From individual considerations such as the flood tax, the low-income offset and the family tax benefits to new small business deductions, capital gains tax and superannuation, you can sift through all the detail HERE.
Contact Us
We hope you enjoy this quarterly edition of TaxTalk, and to discuss your particular situation in more detail, please feel free to contact any of the accountants in our Myrtleford or Bright offices.
Select older versions of TAXTalk are listed below:
August/September 2010 - The Henry and Cooper Reviews
File Size 103KB
June/July 2010 - Year-end Tax Planning Guide
File Size 85KB
Apr/May 2010 - Federal Budget Bulletin
File Size 86KB
Feb/Mar 2010 - Company Assets Used Privately
File Size 93KB
December/January 2010 – Unprofitable Businesses – Still Deductible?
File Size 91KB
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