Taxation
Tax break on interest savings:
From 1 July 2011, you will receive a 50% tax discount on up to $1,000 of interest income earned, including interest earned on deposits held in authorised deposit taking institutions, bonds, debentures and annuity products.
The discount will be available for interest income earned directly as well as indirectly, such as via a managed fund (unit trust).
Tax saving resulting from 50% discount
* Ignores Medicare Levy/Surcharge
Standard tax deduction for work-related expenses & costs of managing tax affairs
From 1 July 2012, the Government will provide you with a standard tax deduction of $500 for work-related expenses and the cost of managing tax affairs (e.g. tax agent fees).
From 1 July 2013, the standard deduction will increase to $1,000.
If you have deductible expenses greater than the standard deduction amount, you will still be able to claim the higher expenses instead of claiming the standard deduction amount.
Personal tax rates applicable from 1 July 2010
Personal tax rates 2010/11 onwards
* Plus Medicare Levy/Surcharge
Improvement to Low Income Earner Tax Offset (LITO):
The increase to the Low Income Earners Tax Offset to $1,500, and the shade-out threshold of $30,000, means that the amount that you can earn before you are liable to tax (i.e. the effective tax free threshold resulting from the low income earners tax offset) is outlined in the table below:
Effective tax-free thresholds 2010/11 onwards
* Ignores Medicare Levy/Surcharge
Senior Australian Tax Offset (SATO)
The amount of income a senior Australian eligible for SATO can earn before they pay income tax or the Medicare levy, will increase from $29,867 to $30,685 for singles, and from $25,680 to $26,680 for each member of a couple.
Increasing the Medicare levy low-income thresholds
With retrospective effect from 1 July 2009, the Medicare levy low-income thresholds will increase to $18,488 for individuals and $31,196 for families.
The additional amount of threshold for each dependent child or student will also increase to $2,865.
Also effective from 1 July 2009, the Medicare levy threshold for single pensioners below Age Pension age will increase to $27,697.
Increase in the net medical expenses tax offset claim threshold
Effective from 1 July 2010, the threshold above which a you may claim the net medical expenses tax offset (NMETO) will increase from $1,500 to $2,000. This threshold will also be indexed annually to the Consumer Price Index from that date. The first indexation adjustment to the threshold will take place on 1 July 2011.
The NMETO currently allows taxpayers to receive a tax offset equal to 20 per cent of net unreimbursed eligible medical expenses above $1,500. The claim threshold is not currently indexed and was last increased in the 2002-03 income year.
Improvements in CGT small business concessions
Arrangements for the sale of a business where the buyer or seller may be entitled to additional payments (referred to as “earnouts”) if certain profit targets are reached, are to potentially qualify for the small business CGT concessions.
If legislated, the proposals will have effect from the date of Royal Assent with transitional relief available in certain cases from 17 October 2007.
