Personal Income Tax Rates for Resident Payers
Tax payers are generally required to pay a certain percentage of tax depending on their level of income. Anyone who earns over the tax free threshold during the course of a financial year, 1 July – 30 June, is required to submit an individual tax return to the Australian Tax Office. Personal Income Tax Returns address all significant financial transactions by the taxpayer for the year.
The following table shows how much tax is to be paid for particular ranges of income for the 2012/2013 financial year.
|Taxable Income||Tax on this income|
|0 – $18,200||Nil|
|$18,201 – $37,000||19c for each $1 over $18,200|
|$37,001 – $80,000||$3,572 plus 32.5c for each $1 over $37,000|
|$80,001 – $180,000||$17,547 plus 37c for each $1 over $80,000|
|$180,001 and over||$54,547 plus 45c for each $1 over $180,000|
The above rates do not include the Medicare levy of 1.5%.
Low Income Tax Offset (LITO)
No changes were mentioned in the 2013 Budget. Individuals will now be entitled to receive the Low Income Tax Offset (LITO) if their taxable income is below $66,667. Low income earners will have an effective tax-free threshold of $20,542.
Medicare Levy increased
The Medicare Levy will be increased from 1.5% to 2% effective from 1 July 2014.
Self Education Expense capped
From 1 July 2014, a $2000 cap per person on tax deduction claims for work-related self-education will come into effect.
Net Medical Expenses Tax Offset changes
The net medical expenses tax offset is to be phased out.
Baby Bonus is abolished
The current Baby Bonus would be abolished from 1 March 2014, and payments would now be made under Family Tax Benefit Part A.
Removal of HELP Discounts
Higher Education Loan Program (HELP) discounts will be omitted from 1 January 2014. These discounts include:
• 10% discount available to students who opt to pay their student fees up-front; and
• 5% voluntary repayment bonus to ATO of $500 or more
These changes will allow HELP to be collected effectively through the tax system.
Capping Tax-free pension earnings at $100,000
From 1 July 2014, tax exemptions for earnings on superannuation fund assets supporting incomes streams will be capped at $100,000 per person, per annum. Income in excess of $100, 000 will be taxed at a rate of 15%.
Personal Income Tax Returns address all significant financial transactions by the you for the year. So this includes not only income from employment and wages but also regular income from investments and rental properties as well as one-off payments as a result of the sale of assets. Additionally, any losses incurred during the period also affect the net amount of taxable income and hence the total amount of tax payable by you.
If you are submitting your personal income tax return yourself it must be lodged with the Tax Office by 31 October each year. However, if your return is prepared and lodged by a registered tax agent the deadline is significantly extended. It is important to diligently submit regular tax returns in order to avoid incurring penalties and the increased possibility of being audited.
Here at The Quinn Group we work hard to ensure that our tax clients are aware of what they can and cannot claim on their returns and we work with you to legally minimise the amount of tax that you are required to pay. For more information submit an online enquiry or call us on 1300 QUINNS (784 667) or +61 2 9223 9166 to book an appointment today.