Federal Budget & tax

Listen to a Preview

Running Time: 8:30

Date: 01/06/2014

The Budget Repair Levy was the big talking point of the 2014 Federal Budget, but don't ignore the other tax changes announced.

The worst kept secret was confirmed, that from 1 July 2014, a temporary three year Budget Repair Levy will apply to individuals earning over $180,000. Combined with the increase in the Medicare Levy, it means the top marginal tax bracket will be 49%.

Michael Jones reminds us that whenever there are changes in tax rates, you need to try to incur income in periods where there are lower tax rates, and incur deductions when there are higher rates. Examples include the timing of paying dividends and the use of corporate beneficiaries to increase earnings within companies.

Other Budget matters highlighted by Michael include the announced company tax decrease to 28.5%, the increased super guarantee to 9.5%, and the sensible decision to  allow excessive non-concessional contributions to superannuation to be removed without penalty. Now that's good news!