The Carbon Tax countdown has begun…
The Carbon Tax Legislation is the biggest tax change in Australia since the GST.
What does this mean for you?
Last July, the Federal Government announced changes to the personal income tax system as part of the plan for a clean energy future. These main changes come into effect on 1 July 2012:
- Tax-free threshold will increase from $6000 to $18,200
- The Low-Income Tax Offset (LITO) reduces from $1,500 to $445.
- Medicare Levy low income thresholds have also been increased.
- First marginal tax rate will increase from 15% to 19%
(on taxable income from $18,201 to $37.000.) - Second marginal tax rate will increase from 30% to 32.5%
(on taxable income from $37,001 to $80,000.) - Removal of the temporary flood and cyclone reconstruction levy (Flood Levy).
- Changes to the Net Medical Expenses Tax Offset and Phase out of the Mature Age Worker Tax Offset.
Four things Business Owners should know about the new tax changes in 2012/13
When you're busy running a business, it's hard to find time to work out exactly what the Federal Budget and new tax changes will mean for your business. See below for a quick summary.
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Personal tax changes related to clean energy legislation (Carbon Tax)
From 1 July 2012, the Government will deliver tax cuts to low and middle-income individuals by increasing the tax-free threshold adjusting the first two marginal tax rates over two phases and by removing the Flood Levy. A payroll system software upgrade will be required for most businesses. -
Taxable payments reporting – building and construction industry
From 1 July 2012, businesses in the building and construction industry need to report the total payments they make to each contractor for building and construction services each year. Affected businesses need to report these payments to the ATO via a taxable payments annual report. -
Loss carry back scheme
From 1 July 2012, companies can carry back tax losses so they get a refund against tax paid in the previous year, providing a tax benefit of up to $300,000 per year. -
Instant asset write-off
From 1 July 2012, the small business instant asset write-off will increase from $1,000 to $6,500.