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2018 Tax Budget: How individuals are affected?

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As the much-awaited Federal Budget 2018 has been declared, are you wondering what’s in it for you and your family?

We’ve prepared a list of changes that the budget has brought for each individual tax payer in Australia. So, before the tax filing period commences, look at how you are affected.

  1. Personal Income Tax Burden reduced: The government has proposed a Person Income Tax Plan over the course of 7 years to help lower the tax burden on lo to middle income earners. The government has proposed two solutions to help you make the most of your income earning capacity,
    1. The tax bracket hindering tax payers from earning more has been removed altogether, so you can expect a relief on your tax liability starting next financial year. Starting 01/07/2018, the upper threshold for the 32.5% tax bracket will be raised to $90,000 from $87000. The removal of tax bracket will save you the trouble of hindering yourself from earning more and will ease the online tax return process.
    2. Now, you’ll also be able to claim greater tax relief, as there are offsets available for low to middle income earners. If you are earning below $37000, you’ll have to pay $200 less tax. The pie chart[1] depicts the respective maximum tax offsets available for various tax brackets and the number of individuals anticipated to benefit from the scheme.
  2. Benefits for Aged tax payers and pensioners: The government has shifted focus to longer independent life in extension to their health sector initiatives. There are major benefits proposed for Australians aged 50 or above and pensioners, namely,
    1. Pensioners are now allowed to earn $1200 extra annually without compromising their pension payments. Now it’s possible for pensioners to earn more on the side and enjoy old age without having to rely on just pension or having to pay high taxes.
    2. Job prospects have also been improved for aged pensioners as the Restart Wage Subsidies are proposed and $2000 incentives are being offered for skill regeneration and enhancement opportunities for Old Age workers.
    3. Funding has been introduced and increased for home care facilities. There are plans to increase high level home care packages[2] by 14000, by the financial year 2021-22.
    4. Provision of funding has also been promised to protect mature aged Australians from abuse, facilitating trails and other legal services.
  3. Infrastructural enhancement: The Australian government has declared plans of investing $2.4 billion to improve Public technological infrastructure, to promote the concept of smart economies. So, you can expect better connectivity and improved GPS. Online Tax Returns are also at the receiving end of improved information technology. The transportation system is also getting a facelift, as approximately $24.5 billion has been set aside for transportation infrastructural improvement.
  4. Farmer Support: Individuals engaged in farming and agricultural sector can expect better infrastructure in all areas – water, GPS and protection of crops against pests. Government funded expert help will also provided to such individuals. Our experts are happy to discuss the same and provide help. To file a personal tax return online, you can use our easy to navigate website.
  5. Power Costs: If you are feeling burdened by your electricity bills, there’s good news for you. An average household can expect a fall of $400 in their annual electricity bill. With the budget, the government has promised lower prices and better form of energy.
  6. Job Prospects – To enhance the job prospects, as well as promote tourism, the government has planned to invest $500 million to provide secure jobs in regional areas, specially the Great Barrier Reef.
  7.  Youth Allowance: The Parental Income Test limit has been surged by a whopping $10,000. So, if you are a dependent student, your parents can earn $10,00 more, without making you ineligible for claiming the Youth Allowance.
  8. Testamentary Trust income changes for minor beneficiaries: If you or your child is deriving income from assets of a deceased estate, then you need to be more careful towards which assets your income is coming from. Minors will only be provided the concessional tax rate if the asset id from the deceased estate, if the asset  is personal or unrelated, you may be charge  at the adult marginal rate.
  9. Medicare Levy and Medicare Levy surcharge: To stay true to the focus of promoting good health and long life, the government has increased the threshold limit for individuals, families and pensioners. The following changes have been observed,
    1. Individuals – increased from $21,655 to $21,980
    2. Family – increased from $36,541 to $37,089. Dependent child/student limit increased from $3,356 to $3,406
    3. Pensioners and seniors
      1. Single – increased from $34,244 to $34,758
      2. Family – increased from $47,670 to $48,385 (excluding dependent children threshold)
    4. Also, the proposed increment for the year in the Medicare levy for the years 2019-20 have been called off, keeping your Medicare levy rates to 2%.


      If you have children, the Medicare Levy Surcharge threshold would also be higher for you now, as it has been increased by 00 per child (after the first child).

  10. Celebrity Status Income: If you are reading this and are a famous sportsperson or actor/actress, chances are that your personal tax liability will continue to fall on you. The previous ruling of charging at least 10% of income derived by exploitation of fame or public image to your associated licensee will be discontinued. So, the celebrity tax payer will continue to be charged at their marginal tax rate for income including non-cash benefits.

For further information or for Online Tax Return Filing, use our easy to navigate Tax Filing portal.

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