07 Jun 2017 Federal Budget Tax Issues
Another federal budget has been and gone and now the tax accountant commentary begins. Here is a snapshot of some of the major tax issues for the 2017 Federal Budget:
Super tax strategies have taken a hit and it’s not really all just upper end. They have effectively taken away some tax effectiveness for high balances (over $1.6m) but they have also restricted the ability of the average Australian to accumulate super savings in the first place. There are now much stricter limits on annual contributions and lifetime extra contributions that you make into super. The result being that for younger generations it will be harder to get $1.6m into to super over a lifetime. Baby boomers win again (did someone say death duties tax )
Small business entities have benefited with a reduction in the company tax rate to 27.5% in the 2017 financial year (down from 28.5%). They have lifted the eligibility threshold for the 2017 financial year to businesses with a turnover of up to $10m (up from $2m). That’s a decent win. For a 12 month period in 2017 it also gives those businesses access to the $20,000 low cost asset write off. Importantly the small business capital gains tax concessions have been excluded from this threshold increase so there is no benefit there. Just keep in mind that the reduction in the company tax rates (in your company tax return) is not really a long term saving because the franking tax credit that goes to the individual dividend recipient will only be 27.5% as well.
Individual tax thresholds for middle income earners have been improved lifting the $80,000 threshold amount to $87,000 for a rate of 32.5%. Over this it goes up to 37%. This apparently effects about 500,000 taxpayers.
They are the major ones relevant to the small end of the market. Feel free to contact Taxopia with any business tax return questions or if you have questions about how the 2017 federal budget might impact your own tax issues. Your expert Australian online tax accountants.