The only constant about tax is change.  We all know about the controversial Carbon and Mining Resource Rent Taxes starting on 1 July, but what are the other changes?   Adrian Raftery, author of 101 Ways to Save Money on Your Tax - Legally! 2012-13 edition (Wrightbooks, June 2012, AU$24.95), provides us with some of the tax changes coming into play from 1 July.

1.      Income tax cut

Hooray!  For the first time in 2 years we are getting a tax cut from 1 July.  But don’t go popping the champagne corks just yet, as the maximum tax cut of $600 (mostly going to low income earners) will barely offset the expected price rises expected with the introduction of the new carbon tax. Those earning above $80,000 will get a paltry $3 tax cut … for the whole year!

2.      Immediate write-off for small business assets

Small businesses will be eligible to immediately write-off new business assets that cost less than $6,500. Businesses will also be able to claim the first $5,000 on any new vehicles purchased after 1 July.

3.      Super contribution limits halved for those over 50

The concessional contribution limit for those over age 50 will be halved to $25,000 in line with everyone else. The government has also deferred the indexation of the cap until at least 2014–15, when it is expected to rise to $30,000. In that financial year the concessional contributions cap increases to $55 000 for those over 50 who have less than $500,000 in super.

4.      Super contribution tax double for high income earners

The tax on concessional superannuation contributions doubles - from 15 per cent to 30 per cent – on contributions made by individuals who earn more than $300,000.

5.      Super co-contribution halved

The government is halving the super co-contribution by only matching 50 per cent of personal super contributions, up to a further $500.  The upper threshold is also being reduced from $61,920 to $46,920.

6.       $500 superannuation bonus

The government will provide a contribution of up to $500 annually into the superannuation account of workers on adjusted taxable incomes of up to $37,000. This will ensure that no tax is paid on superannuation guarantee contributions and is to be offered in addition to the co-contribution scheme. From 1 July 2012, employers must include the date that they intend on paying accrued superannuation on payslips provided to employees. From 1 July 2013, employers must also advise of the date that they last paid contributions on behalf of employees.

7.       Means test for private health insurance rebates

From 1 July, the 30 per cent rebate on private health insurance premiums is going to gradually phase out for those who earn over $84,000 (singles) or $168,000 (couples).  It will be eliminated altogether for those earning above $130,000 (singles) or $260,000 (couples). 

8.       Medicare levy surcharge increasing for high income earners

If you earn above $130,000 (singles) or $260,000 (couples) and do not have adequate private hospital cover then the medicare levy surcharge will rise by 50 per cent to 1.5 per cent of your taxable income in 2012/13.

9.       Carry back tax losses

Companies will be allowed to carry-back tax losses up to $1 million (subject to its franking account balance) against tax paid in the 2011/12 tax year.  This will increase to two years from 2013–14.

10.   Reporting contractor payments

From 1 July 2012, businesses in the building and construction industry need to report the total payments they make to each contractor for building and construction services each year.

11.   Medical expenses tax offset means test

The 2012 federal budget announced that for taxpayers with adjusted taxable income above the Medicare levy surcharge thresholds ($84 000 for singles and $168 000 for couples), the threshold above which a taxpayer may claim the medical expenses offset will be increased from $2000 to $5000. The rebate will also be halved to 10 per cent for eligible out-of-pocket expenses incurred.

12.   Dependent spouse & mature age rebates phased out

Those taxpayers with spouses born on or after 1 July 1952 will no longer be eligible for the dependent spouse rebate.  The mature age offset will also be phased out for taxpayers born on or after 1 July 1957.  Eight dependency tax offsets (including invalid relative and parent/parent-in-law tax offsets) will be consolidated into a single, streamlined and non-refundable offset that is only available to taxpayers who maintain a dependant who is genuinely unable to work due to carer obligation or disability.

These changes were provided by Mr Taxman, Adrian Raftery, author of 101 Ways to Save Money on Your Tax - Legally! 2012-13 edition (Wrightbooks, June 2012, AU$24.95RRP).

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