Budget Issues for Personal Taxpayers

Last Tuesday’s Budget speech saw significant changes to personal and business taxation.

In particular personal taxpayers should be aware of the following:

• Cancellation of the Baby Bonus.  It has been replaced with changes to Family Tax Benefit Parts A & B, however these new payments are worth significantly less than the Baby Bonus.
• A pause on indexation for the Family Tax Benefit.  This means families who are marginally within the current income limit will lose their entitlements as their income rises with inflation.
• The phasing out of the net medical expenses tax offset (NMETO).
• A limit of $2000.00 for deductions for self-education expenses.
• An increase in the Medicare levy from 1.5% to 2% to fund the NDIS.
• An increase in the Superannuation Guarantee from 9% to 9.25%.
• A decrease in the Concessional Contribution Cap on Superannuation for taxpayers with less than $500,000 to $35,000 for those aged over 60.
• The introduction of a 15% tax on pension earnings in excess of $100,000.00.

If you are concerned about the impact these changes may have on you please contact us for tax planning advice.