The only constant about tax is change. Here are some of the tax changes coming into play from 1 July.
1. Flood levy
For the first time in 9 years we are not getting a tax cut from 1 July. Even worse, some of us will be slugged more tax for the first time in decades with the introduction of the Flood Levy with it being charged at 0.5% for those with taxable incomes over $50,000 and increasing to 1% for those earning over $100,000. It feels a bit unpatriotic to complain though as the pain is small compared to those in Queensland that lost everything earlier this year.
2. Phasing out of dependent spouse rebate
If you have a spouse born on or after 1 July 1971 then you will no longer be able to claim the dependent spouse rebate.
3. Youth allowance loophole closed
Despite a favourable High Court ruling in November 2010, where students that received the Youth Allowance could claim self-education expenses in their tax return for the last four years, this will not be available next year after the loophole was closed in the May Budget.
4. Children’s bank accounts
Previously $3,333, the maximum that kids can now receive in “unearned” income, such as bank interest, dividends and trust distributions, is $416 without it being taxed as the generous Low Income Tax Offset has been removed for minors. The $1,500 rebate can now only be offset against their part-time wages.
5. Uniforms now part of Education Tax Refund
School uniforms purchased after 1 July 2011, will be claimable for the first time ever under the Education Tax Refund. Great news for parents who struggle financially in kitting out those growing bodies.
6. HELP discount to reduce