Federal Budget 2019: Tax (individuals)
This article is published by Modoras Accounting (QLD) Pty Ltd V11022019
Federal Budget 2019 Initiatives: Tax (individuals)
- Immediate tax relief for low-to-middle income earners
- Reduction of key marginal tax rates
Immediate tax cuts for low-to-middle income earners
Effective 1 July 2019
The Low and Middle Income Tax Offset (LMITO) was introduced in last year’s Budget as an addition to the the Low Income Tax Offset (LITO). The LMITO will increase for individuals and families, starting from the current financial year, with eligible low-to-middle income earners receiving a payment after submitting their tax return.
The base rate for the LMITO will increase from $200 to $255 and the maximum payment will increase from $530 to $1,080.
From 1 July 2022, both offsets will be replaced by a single low-income tax offset.
Extension to personal income tax cuts
Over the next five years, many Australians will receive a decrease to their income tax rate in one of three ways:
- The upper threshold for the 19% marginal tax rate will increase from $37,000 to $45,000.
- The 32.5% marginal tax rate will reduce to 30%.
- The 37% marginal tax rate will be abolished (this change has already been legislated).
These changes will be progressively rolled out between now and 1 July 2024, as shown in the table below:
Increasing the Medicare Levy low-income threshold
The Government will increase the Medicare Levy low-income threshold for singles, families, and seniors and pensioners from the 2018-19 income year.
You won’t be charged the Medicare Levy if your taxable income is below the following thresholds:
IMPORTANT INFORMATION: This blog has been prepared by Modoras Accounting (QLD) Pty. Ltd. ABN 81 601 145 215. The information and opinions contained in this blog is general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance or credit). No individual's personal circumstances have been taken into consideration for the preparation of this material. The information and opinions herein do not constitute any recommendation to purchase, sell or hold any particular financial product. Modoras Accounting (QLD) Pty. Ltd. recommends that no financial product or financial service be acquired or disposed of or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances. Information, forecasts and opinions contained in this blog can change without notice. Modoras Accounting (QLD) Pty. Ltd. does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Accounting (QLD) Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Accounting (QLD) Pty. Ltd. nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication. Liability limited by a scheme approved under Professional Standards Legislation.
Copyright Modoras 2018. All Rights Reserved.