Sunday, May 16, 2010

The 2010-11 Federal Budget

The budget at a glance for individuals...

Personal Tax

50% Savings Discount on Interest Earned
From 1 July 2011, a proposed 50% discounted tax on up to $1,000 interest earned. Conditions will apply with respect to taxable income and adjusted taxable income.

Standard Tax Deduction for Work Related Expenses
The government will provide individuals with a standard $500 deduction for work related expenses and cost of managing taxation affairs from 1st July 2012, increasing to $1,000 from 1st July 2013. Those taxpayers with higher deductions will still be able to claim these in lieu of the standard amount. This is part of introducing a 'tick and flick' system of prefilled tax returns.
Personal Tax Ratesno change to already legislated rates for 2010/11 year
Residents: rates and tax payable from 1 July 2010
Taxable income ($) Tax payable ($)
0 - 6,000 Nil
6,001 - 37,000 Nil + 15% of excess over 6,000
37,001 - 80,000 4,650 + 30% of excess over 37,000
80,001 - 180,000 17,550 + 37% of excess over 80,000
180,001+ 54,550 + 45% of excess over 180,000


Low income tax offset
For the current 2009-10 income year, taxpayers are entitled to the low income tax offset of $1,350 if their taxable income is less than $63,750. For 2010-11, this upper threshold will increase to $67,500 to accommodate the previously legislated increase in the offset to $1,500. The low income tax offset will continue to phase out at a rate of 4 cents in the dollar for every dollar of income over $30,000.

Medicare levy
The Medicare levy threshold amount for individuals eligible for the senior Australians tax offset will increase t $30,685 from 1 July 2010 (up from $29,867 for 2009-10).
Medical expenses rebate threshold raisedThe medical expenses rebate threshold will increase from $1,500 to $2,000 from 1 July 2010.

Superannuation

Co-contribution matching rate permanently reduced to 100%
The Government announced that it will look to permanently set the matching rate for the superannuation co-contribution at 100% and the maximum co-contribution that is payable on an individual’s eligible personal non-concessional superannuation contributions at $1,000.

Eligible income thresholds frozen
The Government said it will freeze the indexation applied on the income threshold
above which the maximum superannuation co-contribution begins to phase down for the 2010-11 and 2011-12 years.


There are also a number of proposals for business taxation and GST measures. If you would like further information on these, please email me at sarah.willoughby@willoughbys.com.au

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