2018-2019 Budget Summary

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It’s that epic time of year when the Government hand down their budget for the year ahead. We bunkered down for the night and glued ourselves to the ABC as the news was handed down.  We understand not everyone may have been quite so excited, so we’ve summarised some of the key points here for you, enjoy!

Good stuff

  • A nice little sweetener for low & middle income earners. A tax offset of up to $530 per annum  (for those with taxable incomes up to $125,333).
  • The Medicare levy low income threshold will be raised for single, families and seniors and pensioners.  This means you have a little bit more room before you need to pay the Medicare Levy.
  • 94% of taxpayers will have a marginal tax rate of no more than 32.5% (that’s a decent sized win for many)
  • Some wonderful news for all of our friends in small businesses out there. The $20,000 instant asset write off has been extended until 30 June 2019
  • Superannuation fees are capped at 3% annually for super accounts holding less than $6000. Great for people with small amounts in their super funds that may have been getting slowly swallowed up by fund fees.
  • Pensioners can earn more without impacting their pension payments

Other stuff

  • Additional resources being provided to allow the ATO to focus on additional audits, improving education and guidance materials and generally keeping non-compliant taxpayers and their tax agents honest. Integrity is everything, do the right thing and you’ll be fine.
  • For people dealing in large sums of cash, there will be a limit of $10,000 implemented on any cash payments made to businesses from 2019.
  • For any vacant land owners out there, unfortunately any expenses relating to the that vacant land will no longer be deductible from July 2019
  • If you’re a director of a private company, the government is looking to tighten the rules around the provisions of Div 7a and unpaid present entitlements. The unpaid present entitlement is either required to be repaid to the private company over time as a complying loan or subject to tax as a dividend (talk to your registered tax agent if you’re concerned or want more info)
  • If you pay wages and don’t withhold PAYG, tax deductions will not be allowed for these wages to the small business. In a bid to move people away from the black economy (cash payments).

If you’d like to talk to us about any of the points above or your finances in general, get in touch via the Contact page or you can book an online session with us.

Have a great day mates!

*This photograph was the sunrise shot on the Northern Beaches on the amazing morning of the budget release.

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