How will your personal income tax be affected by the new tax measures? - Aero Accounting Group | Tax Accountants in Canberra, Gold Coast & Sydney

How will your personal income tax be affected by the new tax measures?

In order to deal with the $90bil blow-out in the cash balance from the budget estimates prior to COVID-19, tax measures have been introduced into Parliament. You can find them in the Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Bill 2020.

One of these measures is the personal income tax cuts, in which close to $30 billion will be made available to 11 million taxpayers.

Stage 2 of the Personal Income Tax Plan was set to apply from 1 July 2022, but has been moved forward two years to 1 July 2020.

But what does this mean to the average taxpayer?

Basically, the upper threshold of the 19% tax bracket will increase to $45 000 (from $37 000), and the upper threshold of the 32.5% tax bracket will increase to $120 000 (from $90 000).

Low- to middle-income earners will also receive additional support in the low income tax offset (LITO) through an increase from $445 to $700, and access to the low and middle income tax offset (LMITO) for 2020 – 2021.

The ATO announced that the PAYG withholding tables will reflect the personal tax cuts for 2020 – 2021. However, under- and over-payments of tax is expected to result from the mid-stream change in the income thresholds. Lodgement of the 2020 – 2021 tax return is expected to balance this issue out.

Unsure On What Is The Best Strategy?

If you are unsure if an accountant or bookkeeper is more effective for your circumstances make sure you speak to one of our accounting experts that can guide you to achieve the best outcome based on your current circumstances.

Need a second opinion on your financial situation? Get in touch for an obligation-free meeting and start your journey on financial freedom today.

Who We Are

Aero Accounting Group is a leading accounting firm that assists SMEs and individuals achieve their true potential via the 6-Pillar strategy in order for their clients to live a financially abundant, stress-free and more fulfilling life.
Get in touch today at 02 8417 1090 or email us at info@aerogroup.com.au

Self-Education Tax Deductions Explained: What You Can and Can’t Claim

Understanding what’s claimable and what’s not can be daunting, but...

aerogroupSeptember 9, 2024

Optimise Your Allied Health Practice with Strategic Tax Planning: Key Insights and Tips

Effective tax planning is crucial to maintaining the health and...

aerogroupSeptember 9, 2024

SMSF Property Investment: A Guide to Maximizing Your Retirement

Discover how to leverage your Self-Managed Super Fund to invest...

aerogroupSeptember 9, 2024

ABN vs. ACN: What Every Australian Business Owner Needs to Know

Do you know the difference between an ABN vs ACN?...

aerogroupSeptember 9, 2024

Book an appointment with us now!