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Get the Most Out of Tax Time

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The new financial year has well and truly begun, and if you haven’t already visited your accountant or logged into your MyGov ATO portal to submit your tax return, getting your tax sorted will need to be on the agenda over the next couple of months.

Each year there are changes to tax law and budget announcements made by the Government that are worth keeping yourself up to date with, as they may affect you either as a result of what you can claim at tax time or how your taxable income is calculated. Other announcements made relating to family benefits and other tax rebates could also have an impact on your weekly or monthly outgoings.  To find out about all changes made by the ATO for the new financial year, you read the full list here.

Some of the more general tax and budget related changes likely to affect the average Australian have been listed below:

Tax cuts

For people earning up to $125,000 a year a new low and middle income tax offset will be paid as part of the tax return at the end of the 2018-19 financial year and will result in an extra $200-$530 a year depending on income. There is also a new rebate for people earning up to $125,000 a year. There is also a tax cut for people earning more than $87,000 but less than $90,000 now that the threshold of the 32.5 per cent tax bracket has increased from $87,000 to $90,000.

Child Care Rebate

For parents with children in daycare, slightly lower costs could be applicable for you now that the new Child Care Subsidy has replaced both the Child Care Benefit and Child Care Rebate, coming into affect just over a month ago on July 2. Families were required to complete an online means test before the end of the financial year with the percentage of subsidy determined by a family’s annual adjusted taxable income. The new rules mean that Families earning $186,958 or less will have no cap on the amount of Child Care Subsidy they can claim while families earning over $186,958 and under $351,248 will benefit from an increase in the current cap of $7,613 to $10,190 per child, per year.

Personal and Spouse Superannuation Contributions

Tax deductions are now available to most individuals under 75 years old for personal superannuation contributions, regardless of their employment arrangement. Previously, only those who were self-employed or earned less than 10% of their total income as an employee were eligible to claim this deduction. Eligibility rules apply and you need to be aware of the effects of claiming this deduction. There is also a new income threshold for superannuation contributions on behalf of your spouse. The spouse income thresehold has been increased from $10,800 to $37,000. Meaning if your spouse’s income is $37,000 or less you can claim up to the maximum $540 tax offset for super contributions you make on your spouse’s behalf.

Minimum Wage Increase

The Fair Work Commission announced a 3.5 per cent increase to minimum wages in July, bringing the national minimum wage to $719.20 per week on the basis of 38 ordinary hours a week or $18.93 per hour, amounting up to an extra $24.30 per week for those on minimum wages.

Laws are always changing, and with the rising cost of living in Australia, particularly in capital cities, tax rebates and cuts are always a welcome relief. To get the most out of your tax return ensure you are up to date with all changes which might be relevant to you. If unsure about how these changes might affect you, speak to an accountant. And if seekig specific financial advice the friendly staff at Endeavour can refer you to a Bridges financial planner for a no obligation initial chat.  

Alison Gallagher is a freelance writer, resourcefulness expert and entrepreneur. She has been featured in various publications including Stellar Magazine, Australian Health and Fitness Magazine, and Cleo Magazine. Alison is particularly passionate about sharing practical tips on how to live simply, sustainably and seasonally.