With the budget announced many people are wondering how it will affect their tax and superannuation as individuals or business owners. Below are the most notable changes, please note that the following is not legislation as of yet. The budget needs to pass through parliament first and with the federal election soon to come this year, the entire budget could change if another party is elected to office.
The government have increased the low-income tax offset from $530 to $1,080. This will affect taxpayers earning up to $126,000 per year. Meaning more money in your pocket when you come to do your tax return for 2019 onwards, this will effect around 10 million Australians.
From the 2025 financial year, the government has proposed the marginal tax rate to decrease from 32.5% to 30%, this will apply to $45,000 and $200,000. This means that we only have three marginal tax rates from 2025, simplifying our tax system moving forward.
The much loved instant asset write-off is set to continue, with the threshold set to increase from $20,000 to $25,000 and further expansion to $30,000. This is set to greatly improve the cash flow for businesses. The scheme eligibility has increased from small business only to include medium-sized business up to 50 million annual turnover. It is likely that this asset write-off will become permanent, no matter who is in government, rather than being extended each budget night.
From 2021, individuals approaching retirement (aged 65 & 66) would be able to make voluntary contributions without having to satisfy the work test. This will align with the rise to pension age of 67 in 2024. This will likely abolish the work test in years to come.