Last night the Treasurer presented hi budget. I set out below the major changes.
The Government has announced that it will bring forward changes to the personal income tax rates that were due to apply from 1 July 2022, so that these changes now apply from 1 July 2020 (i.e., from the 2021 income year). These changes involve:
- increasing the upper threshold of the 19% personal income tax bracket from $37,000 to $45,000; and
- increasing the upper threshold of the 32.5% personal income tax bracket from $90,000 to $120,000.
The changes in tax rates will not apply until the budget has received royal ascent, then tax tables will change and you will see an increase in your net wage.
The Low Income Tax Offset (LITO) which principally applies to incomes below $37,500 will be increased from $445 to $700
The Low And Middle Income Tax Offset (LAMITO) which was to cease on 30th June 2020 has been extended to 30th June 2021, valued at $1,080 on taxable incomes between $48,000 and $90,000.
The immediate write off of depreciable capital assets has been extended to 30th June 2022 and the cap of $150,000 has been removed so the claim is uncapped.
Carry back of tax losses against prior year profits is reintroduced but beware this only applies to companies.
JobMaker Hiring Credit introduced to provide employers with a Tax Office credit when employing new young (up to age 35) employees. Credt is for a twelve month period and capped at $10,400
If you wish to discuss how these changes may effect you, please contact us