Mr Taxman
Change the way you feel about taxes.
Get informed and discover what the taxman doesn't want you to know.
Sharing it with Australia, Mr Taxman is a regular Woman’s Day columist and TV finance commentator
  • click to visit Mr Taxman on Twitter
  • click to visit Mr Taxman on FaceBook
  • rss

FEDERAL BUDGET - What it means to you

May 11, 2010

Wayne Swan delivered a fairly tame, yet solid, Federal Budget for the nation this week. Whilst the $40.8 billion deficit looks scary it is actually $16.3 billion less than what was expected. The Treasurer is also predicting a return to surplus three years earlier than expected. Good news.

Only a handful of goodies were expected after the handouts we got in last year's stimulus packages. But what would an election year be without a few incentives? Here is what you can expect.

Low Income Earners

In 2010/11, the Low Income Tax Offset will increase from $1,350 to $1,500. This is great news for low income earners who will be able to effectively earn up to $16,000 tax free. The Senior Australian Tax Offset will also increase to $30,685 for singles and $26,680 each for couples.

Tax cuts

Most taxpayers can expect a $300 tax saving from 1 July as the 30% marginal tax rate threshold increases from $35,000 to $37,000. The 38% marginal tax rate will decrease to 37% resulting in a potential tax saving of up to $1,000 for those earning more than $80,000.

Medicare levy threshold

Singles earning less than $18,488 and couples with a combined income under $31,196 will be exempt from paying the Medicare Levy in the 2009/10 year. However the threshold that taxpayers can claim 20% of net medical expenses has risen from $1,500 to $2,000.

First Home Savers

First Home Saver Accounts holders will no longer have to wait four years before they are able to buy a home due to a relaxation of the rules.

Super guarantee increasing

As announced in the Henry Tax Review, the super guarantee levy will be gradually increased by 3% to 12% in 2019.

$500 more for low earners

The Government will top up the super funds of wage earners by $500 if they earn less than $37,000.

Concessions for over 50s

Workers over 50 who have less than $500,000 in super will be able to contribute up to $50,000 a year from 2012.

Lower company tax

The company tax rate will reduce by 2% to 28% by 2014 with small businesses getting access to the cut a year earlier. Small business also wins with an immediate write-off for assets up to $5,000.

On a positive note ... the 50% tax discount on up to $1,000 of interest income from 1 July 2011. This will definitely make saving alot more attractive and provides an even playing field to those already enjoying tax advantages for share and property investments. This will place downward pressure on banks’ funding costs resulting in more competitive loan rates for home owners.

On a negative note ... the $500 standard deduction for work related expenses from 2012/13. An unofficial "$300 without receipts" system has been operating for umpteen years and it has been long overdue a CPI upgrade. According to ATO statistics, the average tax deduction claimed by individuals in 2007/08 was $3,311.

Tags: BudgetEmployeesPropertySmall BusinessSuper

Author: Mr Taxman

Comments

Post a New Comment

Media Availability

Are you interested in booking Mr Taxman for a speaking engagement or requesting his viewpoints for an article?

comments-rhsLatest Comments

  • "Hi An employee has been approved for deferred HELP debt repayments. How do I stop payments being deducted from his pay? We use Xero Payroll I was told to uncheck the section regarding HELP/HECS..."

    By: Janice at Mar 23, 2017 3:06AM

    Post: Two important dates for those with HECS/HELP debts

  • "My name is Mr Fredrick Peterson. I am a private lender who give out loan to private and corporate individuals. Have you been turned down by so many banks? Do you need finance to establish your..."

    By: Mr Fredrick at Mar 22, 2017 9:49PM

    Post: Marriage

  • "Welcome to HENRY LOANS COMPANY ( henryloanscompany@yahoo.com ) Henry loans Company Provide offer loan at a very low interest rate of 3%, we offer Personal loans, Debt Consolidation Loan, Venture..."

    By: HENRY at Mar 22, 2017 12:25PM

    Post: The secret to getting your loan approved

  • "AFFORDABLE LOAN OFFER WITHOUT UPFRONT FEES Hello, What are your Financial needs? We give out loans from a minimum of $2,000.00 to a maximum of $100,000,000.00 with comfortable duration that..."

    By: SERGEY YAKUBOVA at Mar 21, 2017 7:45PM

    Post: ATO demands Aussies declare income from Uber

  • "URGENT GENUINE LOAN OFFER APPLY NOW. Do you need an urgent loan or any other financial assistance? We offer all type of loan at three percent (3%) interest. email us now vi..."

    By: harry morgan at Mar 20, 2017 8:15PM

    Post: ATO demands Aussies declare income from Uber