So, guess what? There are some big changes coming to Australia’s tax system, and I’m here to break it down for you.
You might have heard about the “Stage 3 Personal Income Tax Cuts” set to kick in on 1 July 2024, right? Well, hold onto your hats because the Federal Government just announced they’re tweaking this plan!
This whole tax plan saga started back in the 2018-19 Federal Budget. The aim was to tackle ‘bracket creep’ (where your tax rate doesn’t keep up with your wage increases). The plan had three stages, starting in 2018 and 2020, with this final stage planned for 2024.
Download the document above if you’re after some more in-depth detail – otherwise, for the short version, here’s the scoop:
- More Money in Your Pocket: The good news? More Aussies will see a fatter wallet. The government is reshaping the tax cuts to help those not rolling in dough.
- What’s Changing? If you’re earning less than $146,486, you’re likely to get a bigger tax cut than originally planned. For those making $40,000 a year, expect a $654 tax cut. Way better than the zero you’d get under the old plan.
- Not Everyone’s a Winner: If you’re in the high-income bracket, like earning $200,000, the tax cut you were expecting gets halved.
- Low-Income Earners Get a Break: There’s also a bit of relief for those low-income earners. The amount you need to earn before paying the Medicare Levy is jumping. That’s a nice buffer against inflation.
- Cost and Legislation: This reshuffle will cost the government about $1 billion more over four years. But, and this is a big ‘but’, it’s not set in stone yet.
So there you have it! Keep an eye on this space, because it’s not a done deal yet. But if it goes through, it could mean a nice little boost in your pay packet, especially if you’re not at the top of the income ladder. Stay tuned!
If you’re interested in learning how our Accountants can help you manage your Personal Tax and comply with ATO regulation, check out our Personal Tax Return & Tax Advice page for more information.
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