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Horizon Articles

Education Tax Refund …Read more

 

 

 

 

 

As announced in the 2008-09 Budget, families will be able to claim a 50 per cent Education Tax Refund from 1 July 2008.  The aim of the Education Tax Refund is to help families meet the costs of educating their children and ensure that they have access to the resources needed to improve educational outcomes.

Eligible families will be able to claim a 50 per cent refund every year for eligible education expenses up to:

  • $750 for each child undertaking primary studies (maximum refundable tax offset of $375 per child, per year); and
  • $1,500 for each child undertaking secondary studies (maximum refundable tax offset of $750 per child, per year).

Parents entitled to Family Tax Benefit (FTB) Part A in respect of children undertaking primary or secondary school studies for the relevant financial year are eligible to the Education Tax Refund.

Eligibility is also extended to parents with school children undertaking primary or secondary school studies who would be an eligible child for FTB Part A purposes, but for the fact that the child receives certain payments or allowances, for example:

  • Youth Allowance;
  • Disability Support Pension; and
  • ABSTUDY Living Allowance.

Further details are contained in the supporting Fact Sheet below.

Manager
Individuals Tax Unit
Personal and Retirement Income Division
The Treasury
Langton Crescent
PARKES ACT 2600

Email: etr@treasury.gov.au

Documents Available:


Acrobat (PDF) documents

 Acrobat (PDF)

Education Tax Refund – Fact Sheet  76.68kb

 

 

EDUCATION TAX REFUND

 

FACT SHEET

First Home Saver Accounts …Read more

Setting up a first home saver account

What is a first home saver account?

A first home saver account is a savings account designed to offer you a simple, tax-effective way of saving for your first home through a combination of government contributions and low taxes. Using a first home saver account means that from 1 October 2008, the government is going to help you save for a home.

How is a first home saver account different from a normal account?

First home saver accounts are designed to help you buy your first home.

It’s a special purpose account that’s more like a term deposit than a normal, everyday account, because you have to keep the money there for a minimum period of time. Once that time has passed and you make the decision to buy your home, you have to withdraw all the money at once and close the account.

The advantages of a first home saver account over a normal account are that government contributions add to your savings, and withdrawals are tax-free.

Earnings on first home saver accounts are taxed at 15% but this must be paid by the account provider.

You can also make personal contributions at any time – for example, from your pay, a tax refund or an inheritance.

What is a home?

A home is a dwelling. This means a unit of accommodation that’s fixed to the land, such as a:

  • house
  • flat
  • unit
  • apartment
  • townhouse.

It does not include a demountable dwelling, mobile home, caravan or boat, unless it is suitable for you to occupy as a residence and is fixed to land you own.

How long do you have to live in the home for?

You must live in the home for at least six months and it must be your main residence. The six month period must start:

  • within 12 months of you becoming the owner of the home (which happens on settlement of the contract), or
  • within 12 months of the construction being completed. Generally, this is when the certificate of occupancy is issued.

This is known as the ‘occupancy rule’.

How do you apply to open a first home saver account?

You need to decide which account provider you’re going to open your first home saver account with and then complete an application form.

To open an account, you must satisfy the eligibility criteria and provide your tax file number.

Does the first home saver account replace the First Home Owner Grant?

The first home saver account does not replace the First Home Owner Grant. If you meet all the conditions, you may be eligible for both; however, you have to use a separate applications process for each.

For more information about the First Home Owner Grant, visit www.firsthome.gov.au

If you open a first home saver account and earn interest, will this affect your Centrelink payment or your family tax benefit?

Any interest your earn from your first home saver account is not your income and is not taken into account in assessing your entitlement to Centrelink payments including family tax benefit.

Earnings in the account are taxed at 15% but the tax is paid by the provider of the account.

When can you open a first home saver account?

Account providers will be able to offer first home saver accounts from 1 October 2008.

Can you open a first home saver account at your usual bank, building society or credit union?

You need to check whether your bank, building society or credit union is offering these accounts. Account providers also include:

  • life insurance companies
  • friendly societies
  • trustees of public-offer superannuation funds.

 

2008/2009 Tax Rates …Read more

Tax thresholds from 1 July 2008

           Income Range             Rate

           $0 - $6,000                    0

           $6,001 - $34,000          15%

           $34,001 - $80,000         30%

           $80,001 - $180,000       40%

           $180,001+                     45%

Tax thresholds from 1 July 2009

           Income Range             Rate

           $0 - $6,000                    0%

           $6,001 - $35,000         15%

           $35,001 - $80,000        30%

           $80,001 - $180,000      38%

           $180,001+                    45%


Horizon Newsletter

Feb Newsletter…Read more

 

February 2010
This Issue

Club USQ Sponsorship
 

Employment Relation Changes - Wages, Awards and Agreements 
 

Club USQ Sponsorship

 Horizon WealthInvest are proud to announce that we will be sponsoring the Club USQ Breakfast Series for 2010.

The Breakfast Series is held 4 times during the year with the first one being 4th March, 2010. We are excited to have already been able to secure 2 great speakers. The first being Todd Russell, Beaconsfield Mine Survivor and the second being Duncan Free, Gold Medallist in the 2008 Beijing Olympics.

Horizon would like to invite our clients to come along and listen to Todd who will share his experiences on his survival with Brant Webb for 14 days whilst they were trapped almost 1km underground in a 2 x 4m pocket of air.

The cost for the breakfast is $40 per person to be held at Encores - seats are limited - please phone Leigh at Horizon WealthInvest on 07 4659 4666 to secure your place.

Employment Relation Changes - Wages, Awards and Agreements

The Queensland Government has referred the state's industrial relations powers for the private sector to the Commonwealth with an effective date of 1 January 2010.

As from this date all employers and employees, with the exception of state and local government, will be covered by the national industrial relation system administered by the Commonwealth Government.

The Commonwealth Government has implemented its award modernisation process including the National Employment Standards (NES). As part of the introduction of the National Employment Standards (NES), employers will be required to give each person employed on or after 1 January 2010 an information statement. For this NES statement, and how these changes will affect you as an employer, you should contact the Fair Work Ombudsman on 13 13 94 or go to www.fairwork.gov.au and download the relevant information.

Where an employer has Workplace Agreements with their employees prior to the introduction of the National Employment Standards and the new award modernisation, you should contact a workplace relation specialist, for clarification of your Workplace Agreements. Horizon Accounting can help you here, by referring you to a workplace relations lawyer.

To remove your name from our mailing list, please click here.
Questions or comments? E-mail us at info@horizongroup.com.au or call (07)4659 4666
Click here to view our website.

Liability Limited by a scheme approved under Professional Standard Legislation.

Important: This is not advice. You should not act solely on the basis of the material contained in this Newsletter. Items herein are general comments only, also changes in legislation may occur quickly. We therefore recommend that formal advice should be sought before acting in any area.

©Horizon Accounting 2009

December Newsletter…Read more


December 2009
This Issue

50% Investment Allowance


Night with Duncan Free - 2008 Olympic Gold Medallist


Non-commercial Losses


Why Should Business Owners Consider Business Insurance?
 

50% Investment Allowance

As the year is drawing to a close, so too is the governments investment allowance which finishes on the 31 December 2009.

In order to take advantage of this opportunity businesses have until the 31 December 2009 to commit to investing in a new asset. In addition to committing to the purchase before 31 December 2009, the asset must be delivered or built before 31 December 2010.

If you are a small business (i.e. your business and any business connected with yours turns over less than $2 million a year) you may be eligible to claim the additional 50% tax deduction. Your business will need to spend a minimum of $1,000 on an eligible asset. 

However, if your business turns over $2 million or more a year, you maybe able to claim a 10% additional tax deduction. Please note you will need to spend a minimum of $10,000 on an eligible asset.

The investment allowance is a tax deduction in addition to any depreciation that the owner can claim. The investment allowance is claimed in the year that the asset is first used or is installed ready for use.

In relation to financing of assets please be careful, as the financing option taken can affect 'the investment commitment time'; therefore please consider entering into any financial contract before the 31 December 2009.

Also, care should be taken as to the type of finance selected as it may impact on your ability to claim the investment allowance. It should be noted that lease finance does not result in a deduction to the lessee. 

Night with Duncan Free - 2008 Olympic Gold Medallist

Horizon Accounting Group and Horizon WealthInvest were fortunate to have Beijing Olympics Gold Medallist Duncan Free, to give an inspirational talk to clients and staff about the lead up to his gold medal win with Drew Ginn in the rowing men's pair at the Beijing Olympics in 2008.

Duncan's story is one of enormous courage and sacrifice with the pair battling injuries (including a slipped disc in Drew's back); replacement rowers hiding in the bushes so as not to upset the mental psyche of the pair; ice baths to cool their core temperature due to the extremely humid and high temperatures in Beijing and so on. Everyone was able to hold the gold medal and have their photo taken with Duncan.

Professional Investment Services organised Duncan's visit and we thank them for the inspiration that Duncan was able to pass on.

Non-commercial Losses

Currently, an individual who is carrying on a business either as a sole trader or a partner in a partnership can only apply losses arising from the business activity against their other income in an income year if the activity satisfies one of four objective tests. (Note special rules apply to taxpayers conducting a primary production or a professional arts business.)

The Bill will amend the non-commercial losses rules to prevent individuals with an adjusted taxable income of $250,000 or more in an income year from offsetting losses from non-commercial activities against their salary, wages or other income. That is, individuals with an adjusted taxable income above the threshold cannot access the tests. However, an individual can apply to the Commissioner to exercise the discretion not to apply the non-commercial losses rules.

The proposed amendments will apply to the 2009/10 and later income years.

Why Should Business Owners Consider Business Insurance?

Every business with two or more owners should consider what might happen to the business if one of the owners dies, becomes totally and permanently disabled, or suffers a terminal or traumatic illness.

A business generally depends on a few people to produce the profits, provide the capital or manage the business. If there is no viable succession plan, there may be significant financial hardship for the surviving business owners, as well as for the surviving family members.

The core business insurance concepts are:

  • Buy/sell insurance (asset or equity)
  • Debt reduction or guarantor protection insurance (liability), and
  • Key person insurance (liability)

Business insurance is an area of insurance which involves undertaking a full and detailed interview to determine your needs, including the:

  • Needs of the business
  • Amount of insurance necessary to satisfy these needs
  • Cost of the insurance
  • Prioritisation of the business needs and insurance (having regard to the cost); and
  • Underwriting requirements necessary for the amount of insurance proposed.

To arrange a review of your business insurance needs please contact your client manager or Tim Blakeley at Horizon WealthInvest.

To remove your name from our mailing list, please click here.
Questions or comments? E-mail us at info@horizongroup.com.au or call (07)4659 4666
Click here to view our website.

Liability Limited by a scheme approved under Professional Standard Legislation.

Important: This is not advice. You should not act solely on the basis of the material contained in this Newsletter. Items herein are general comments only, also changes in legislation may occur quickly. We therefore recommend that formal advice should be sought before acting in any area.

©Horizon Accounting 2009

October Newsletter…Read more

 

October 2009
This Issue
Superannuation Guarantee Charge

Superannuation Rates and Thresholds

Rates and Thresholds

GIC and SIC Rates

Assistance for Small Businesses

GIC-free Payment Arrangements

Deferral of Payment Due Dates
 

Superannuation Guarantee Charge

The AAT has upheld superannuation guarantee charge default assessments against a partnership for failing to make minimum superannuation contributions for an independent contractor operating within its business.
After considering the factors that indicate the existence of an employee/employer relationship, the Tribunal held that the contractor was an employee.
Indicators that suggest an employee/employer relationship exists include:
  • the level of control between an individual and the other party;
  • the mode of remuneration;
  • the provision for annual leave; and
  • the right to suspend or dismiss an individual by the other party.
> The classification of an individual as an employee or as an independent contractor is not based on the legal terms used in a contract. All of the facts and circumstances of the particular situation must be considered.
 
> An individual engaged for their labour can be deemed to be an employee for superannuation guarantee purposes even where the individual is a contractor.

Superannuation Rates and Thresholds

The Tax Office has released the following superannuation rates and thresholds for the 2009/10 income year:
  • Superannuation guarantee maximumcontribution base:
    $40,170 for each quarterly contribution period. An employer does not need to provide the minimum 9% superannuation guarantee support for an employee’s ordinary time earnings above this limit.
  • Superannuation co-contribution income thresholds:
    The lower total income threshold to qualify for the maximum co-contribution is $31,920. The higher income threshold where the co-contribution completely phases out is $61,920.

Rates and Thresholds

The Tax Office has also released the following rates for the 2009/10 income year:
  • CGT improvement threshold:
     $124,258
  • Car depreciation limit and luxury car limit:
    $57,180
  • Overtime meal allowance expenses:
    $24.95
  • Benchmark interest rate for the deemed dividends provision:
    5.75%

GIC and SIC Rates

The Tax Office has also released the general interest charge (GIC) and shortfall interest charge (SIC) rates for the first quarter of the 2009/10 income year (ie 1 July 2009 to 30 September 2009):
Rate
Annual
(%)
Daily
(%)
GIC
10.13
0.02775342
SIC
6.13
0.01679452

Assistance for Small Businesses

The Tax Office has recently introduced two measures to assist businesses that have an annual turnover of less than $2 million to manage their tax payment obligations.
 
These measures are:
  • twelve-month general interest charge (GIC)-free payment arrangements; and
  • deferral of activity statement payment due dates.

GIC-free Payment Arrangements

A business with an activity statement debt, such as GST and FBT, can apply for a twelve-month GIC-free payment arrangement.
An application for an arrangement must be entered into between 1 June 2009 and 30 June 2010.
  • A business can renegotiate an existing payment arrangement entered into before 1 June 2009 to take advantage of the GIC-free payment arrangement.

Deferral of Payment Due Dates

A business can also request a deferral of payment on its next activity statement. During the period of the deferral, no GIC will apply.
The maximum deferral period will depend on whether a business lodges its activity statement monthly, quarterly or annually.
Activity statements eligible for a deferral include:
  • monthly statements for the period May 2009 to June 2010 (inclusive);
  • quarterly statements for the period June 2009 to June 2010 (inclusive); and
  • annual statement for the 2008/09 income year.

A payment deferral request must be made on or before the original due date of an activity statement. 

 
 

To remove your name from our mailing list, please click here.
Questions or comments? E-mail us at info@horizongroup.com.au or call (07)4659 4666
Click here to view our website.

Liability Limited by a scheme approved under Professional Standard Legislation.

Important: This is not advice. You should not act solely on the basis of the material contained in this Newsletter. Items herein are general comments only, also changes in legislation may occur quickly. We therefore recommend that formal advice should be sought before acting in any area.

©Horizon Accounting 2009

 

May 2009 Newsletter…Read more

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