Budget Overview
Individuals
The previously legislated Low and Medium tax offset of $530 (2018-19 Budget) will now be increased to $1080 per year for single and amount is $2160 for couple and the base amount will increase from $200 to $255 per year from 2018-19 to 2021-22 financial year.
Based on new Low and Medium Income Tax Offset will now provide reduction of $255 individuals with taxable income of $37K or less. For individuals with taxable income between $37k to $48K, the offset will increase by 7.5 cents per dollar to the maximum offset of $1080. Taxpayers with taxable income between 48K and $90K will be the maximum offset of $1080.00. The offset will phase out at the rate of 3 cents per dollar for taxpayers with taxable income of $90K up to $126K
Future thresholds and changes to tax rates
From 01/07/2022 the 19% bracket will be increased from $41K (18-19 Budget) to $45K and Low-income tax offset will increase from $645 to $700. The increased LITO will be withdrawn at a rate of 5 cents per dollar between taxable incomes of $37,500 and $45,000, instead of at 6.5 cents per dollar between taxable incomes of $37,000 and $41,000 (as previously legislated). LITO will then be withdrawn at a rate of 1.5 cents per dollar between taxable incomes of $45,000 and $66,667
For Small businesses
The instant asset write-off threshold will be increased from $25,000 to $30,000 from Budget night to 30 June 2020.
The threshold applies on a per asset basis. Therefore, eligible businesses can instantly write off multiple assets costing less than $30,000 that are first used, or installed ready for use, from Budget night to 30 June 2020.
The instant asset write off will also be expanded to apply to both “small businesses” (those with an aggregated annual turnover of less than $10 million) and medium sized businesses (an aggregated annual turnover of $10 million or more, but less than $50 million).
ABN Obligation and Black economy
ABN holders will have to lodge their tax return on time and Business register will be revised annually for accuracy. From 01/07/2021 ABN holders required to adhere to income tax lodgement obligation and check the behaviour to disrupt the black economy. ABN will be cancelled if no activity on ABN for a period of time.
The measures announced as part of Budget 2019–20 are subject to receiving royal assent and are therefore not yet law We at S & H Tax Accountants are committed to provide exceptional services to small businesses and Individuals in Cranbourne, Clyde, and Clyde North. We offer accounting services in Chadstone and Malvern East