The 2018 financial year has now drawn to a close meaning it’s time to get yourself prepared for the preparation and lodgement your tax returns. We have identified below the key changes affecting deductions and claims this year.

Rental Travel Deductions

As of 1 July 2017, taxpayers are no longer able to claim deductions on travel costs they incur which relates to their rental property. They are now only able to claim travel deductions if the travel is being completed in order to carry out property investing or are an excluded entity such as:

  • Corporate Tax entity
  • Public Unit Trust
  • Managed Investment Trust
  • Unit Trust
  • Partnership
  • Superannuation Plan (excluding Self-Managed Super Funds)

Limiting Depreciation Deductions on Plant & Equipment  

From 1 July 2017, taxpayers cannot claim depreciation of second hand plant and equipment rental properties used for residential accommodation. This applies to all second-hand plant and equipment purchases after 7.30pm on 9th May 2017. Taxpayers cannot also claim plant and equipment installed on or after 1 July 2017 if they have used it for private purposes.

Temporary Budget Repair Levy

The temporary budget repair levy which was introduced in 2014-15 that imposed a 2% levy on the part on an individual’s income that exceeded 180,000 has now been excluded and no longer applies.

Tax Deductions for Personal Superannuation Contributors

The eligibility rules for claiming deductions for personal contributions to superannuation have now changed. Originally only those who were primarily self-employed could claim this deduction. However, from 1 July, most taxpayers under 75yrs, including those aged 65-74 who meet the work test are able to claim a deduction for personal superannuation contributions regardless of their employment status.

Income Threshold for Spouse Super Contributions Tax Offset

From 1 July the income threshold for claiming the tac offset for spouse super contributions increased from $10,800 to $37,000. The maximum tax offset of $540 gradually reduces for income above this level. This will completely phase out for income above $40,000.

The new eligibility rules where tax payers cannot claim this offset if their spouse who received the contribution either:

  • Exceeded their non-concessional contributions cap
  • Had a total super balance of $1.6 Million or more at 30 June 2017.

For more information on this, contact us on 03 5221 6399 or email us at info@davidsons.com.au.

Alternatively, to book an appointment to get your 2018 Ta return done call us on 03 5221 6399.