Federal Budget 2018-19 - What It Means For You

Personal tax cuts

The Federal Government has announced it will give tax relief to anyone earning under $90,000 with some new offsets. The maximum benefit will be $530. That $530 amount will go down the more you earn.

The government is also raising the $87,000 threshold to $90,000 in the current year. There’s more. In the 2022–23 financial year, the 32.5 percent threshold will rise from $37,000 to $41,000, and the 37 percent threshold will rise from $90,000 to $120,000. In 2024–25, the government will scrap the 37 percent bracket completely. The 32.5 percent bracket will affect anyone earning $41,000 – $200,000.

Minors and testamentary trusts: Concessional tax rates limit

The concessional tax rates available for minors receiving income from testamentary trusts will be limited to income derived from assets that are transferred from deceased estates or the proceeds of the disposal or investment of those assets. Currently, income received by minors from testamentary trusts is taxed at normal adult rates rather than the higher tax rates that generally apply to minors.

Medicare levy low-income thresholds for 2017-18

For the 2017-18 income year, the Medicare levy low-income threshold for singles will be increased to $21,980 (up from $21,655 for 2016-17). For couples with no children, the family income threshold will be increased to $37,089 (up from $36,541 for 2016-17). The additional amount of threshold for each dependent child or student will be increased to $3,406 (up from $3,356).

Sources:

Chartered Accountants, Thomson Reuters (2018) Federal Budget: Tax Bulletin 2018-2019
https://www.charteredaccountantsanz.com/news-and-analysis/news/2018-19-australia-budget

MYOB (2018) Explained: Federal Budget 2018
https://www.myob.com/au/blog/federal-budget-2018-explained-for-your-business

TaxBanter (2018) Federal Budget 2018-19
www.taxbanter.com.au