Unless you are with a Registered Tax Agent the deadline is looming to submit individual tax returns for the 2017/18 financial year. For those who have left it to the last minute, it’s also important to be aware of some important changes that came into effect for 2017/2018 financial year.
PERSONAL INCOME TAX PLAN
As announced in the 2018/19 Federal budget up to 10 million individuals will receive a tax cut. The top threshold for the 32.5 per cent bracket has increased from $87,000 to $90,000 reducing the amount of tax withheld from your pay. A new low to middle income tax offset is now available to individuals with an income less than $125,334. This will be a one-off amount applied to your Notice of Assessment.
THE SHARING ECONOMY
The sharing economy is developing in a more modern way we do business, connecting buyers and sellers via an app or website. The ATO are becoming aware of the changes in the way people do business and are implementing processes to be able to capture suspected transactions that may have a tax implication. It is important to take this into account in the preparation of your income tax affairs in the declaration of any money from odd jobs such as transporting passengers or renting out a room.
CRYPTOCURRENCY
Cryptocurrency, such as bitcoin, is considered an asset for tax purposes. If you are involved in acquiring or disposing of cryptocurrency, you will need to keep record of your transactions.
SUPERANNUATION CONTRIBUTION DEDUCTIONS
If you are under the age of 75* you are now eligible to claim a deduction for personal superannuation contributions irrespective of if your receive Employer SGC support. However, it is important to know that deductions can’t be made if your fund falls within certain categories such as constitutionally protected funds such as GESB Weststate.
*including people 65 – 74 years who meet the work test
RENTAL PROPERTIES
From 1 July 2017, travel expenses relating to residential investment property are not deductible. The changes do not affect deductions that arise during carrying on a business of property investing or are an excluded entity. Travel expenditure cannot be included in the calculation of capital gain or loss when a property is sold.
Taxpayers can no longer claim a deduction for the depreciation of second-hand assets for their rental property. Investors who purchase new assets will continue to be able to claim a deduction over the effective life of the asset.
SPOUSE TAX OFFSET
A new spouse income threshold has been set for a tax offset where personal superannuation contributions are made on behalf of your spouse. Previously, this threshold was set at $10,800. This has now been changed to $37,000. If both you and your spouse are Australian residents and your spouse’s total income is $37,000 or less, you can claim up to the maximum $540. Please note contribution caps do apply. To find out if you are eligible for the threshold, visit the ATO website.
FIRST HOME SUPER SAVER SCHEME
From 1 July 2018 individuals can apply to withdraw voluntary contributions made to super after 1 July for a first home. Two different tax rates will apply.
For more changes and information regarding individual tax return changes, visit the ATO website here or contact Pascoes Accounting & Advisory.
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