The measures in the budget have a positive vibe about them – e.g. tax cuts for individuals, additional support for small business investment, helping retirees build their superannuation and the Medicare Levy remaining at 2% and changes that target taxpayers who are not doing the right thing by their employees. In hindsight there were very few changes that affect most Australians.
Here are 7 tax and super changes that you need to know about
- A seven-year Personal Income Tax Plan will be implemented in three steps, to introduce a low and middle-income tax offset, to provide relief from bracket creep and to remove the 37% personal income tax bracket. Most taxpayers earning $80,000 and above will par around $500 less tax next year.
- Last year’s Federal Budget proposal to increase the Medicare levy from 2% to 2.5% from 1 July 2019 will not proceed.
- An exemption from the existing “work test” for voluntary contributions to superannuation will be introduced from 1 July 2019 for people aged 65-74 with superannuation balances below $300,000, in the first year that they do not meet the work test requirements, providing more flexibility for recent retirees to make voluntary contributions.
- Small businesses will be able to continue claiming an immediate deduction for assets that cost less than $20,000 for another year up to 30 June 2019.
- Deductions for expenses associated with holding vacant land not genuinely used to earn assessable income will be denied from 1 July 2019.
- Businesses will no longer be able to claim deductions for payments to their employees where they have not met their PAYG obligations or for certain payments to contractors which have not met PAYG obligations.
- The maximum number of members in a self-managed superannuation fund will be increased from four to six.
We’re here to help you! If you have any questions about how the 2018 Budget affects you – please contact our office on 03 8419 9800 and one of our accountants will help you!