2013 Tax Top 5

Well it’s that time of the year again; time to start thinking about submitting your year-end tax return. Time to collect your payment summary from your employer and scrape together those all-important receipts for tax deductible expenses – out of your wallet, handbag, the glove box in your car and out from among the dust bunnies under your bed. That’s right everybody, it’s Accountant’s New Year! The shutter’s banged shut on the 2012 financial year and there’s not much you can do to change the result but, you can get your 2013 tax return off to a flying start.

While all of you are getting excited about the size of your possible refund, we at iGenWealth are hunkering down for another round of ground hog day but hey, it’s what we do, and before we disappear into our bunker, we thought we’d give a run down on how new changes will affect you, and more importantly the amount of tax you have to pay! So, here it is – our 2013 financial year tax top 5!

Tax rates

The lovely Julia’s provided no relief here with rates unchanged from those in last year’s budget.

Tax free threshold

But, credit where credit’s due Julia, the tripling of the tax free threshold from $6,000 to $18,000 will undoubtedly be a much needed shot in the arm for many of our readers but keep reading, don’t rush out and celebrate just yet.

Low income rebate

Yep that’s correct, Australia’s orangutan giveth and then she taketh away – with the low income rebate dropping from $1,500 in 2012 to $445 in 2013 and then $300 from 2015 onwards. But what’s it all mean? we hear you ask. By way of example, taxpayers with an income of $30,000 will receive an overall tax cut of $303 per year or $5.82 per week. Those on $60,000 will receive $503 per year, $9.67 or the price of a pint per week – don’t spend it all at once!

Private health insurance

There’s been lots of propaganda around this one, mainly due to what we at iGenWealth consider to be an error the government made in the drafting of the legislation which allowed for prepayment of premiums prior to 30th June 2012 to lock in the rebate for those impacted by changes to the system. But, Black Caviar has well and truly bolted now and if you didn’t prepay before June 30, you’ve had it. From 1 July 2012 income tests limit access to the 30% government rebate on health fund premiums. Luckily, singles with income below $84,000 and couples below $168,000 will be unaffected. The rebate phases out progressively to nil for those with income above.

Medicare levy surcharge

Have we got you reaching for the mobile to ditch your health fund on the strength of the point above? Not so fast, Julia’s got you on the ropes because, the 1% Medicare levy surcharge will apply to singles that have income above $84,000 and couples over $168,000 and don’t have appropriate health cover. That’ll ratchet up progressively as income increases to a maximum of an extra 1.5% of income.

We said we’d give you 5 and here it is! As you can see from the above the recent Federal budget was a case of give on one hand and take on the other – what will you be getting?

Wealth information for the iGeneration!

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By Dean Johnson