The 2016/2017 Federal Budget was announced at 7:30pm on 3 May 2016, our professional Accountants and Tax Agents in CLY Tax Accountants & Bookkeepers Lilydale will start to provide some key tax updates regarding the new Budget. Being aware of those tax changes will be helpful when people start to do their tax planning and prepare for 2016/2017 tax returns in Lilydale or other surrounding suburbs.
According to the Federal Budget announced, the individual tax bracket change is one of the great government incentive for hard working Australians to be taxed less with same amount of income. The government is going to increase the up threshold of 32.5% tax bracket from $80,000 to $87,000, which will prevent about 500,000 taxpayers facing 37% marginal tax rate in the next three year. For the taxpayers earning over $87,000, this will effectively save them $315 tax every year from Financial Year 2017 (FY2017).
The proposed resident personal tax rates for Financial Year 2016/2017 is as below:
| Taxable Income Range | Resident Individual Marginal Income Tax Rate |
|
$0 – $18,200 |
0% |
|
$18,201 – $37,000 |
19% |
|
$37,000 – $87,000 |
32.5% |
|
$87,001 – $180,000 |
37% |
|
$180,001 + |
45% |
The new tax bracket need to be applied especially when people doing the tax planning or preparing for future tax returns. Some common examples includes
- The small business owners considering distributing the business profit and withholding tax for employees
- The family discretionary trust considering distributing income
- Employee considering arranging salary sacrifice
- Sole trader considering making personal super contribution
Our local accountants and tax agents in CLY Tax Accountants & Bookkeepers Lilydale always try our best to keep up-to-date with the latest tax changes in order to provide high quality services when helping clients with tax planning and tax returns. Doing proper tax planning can be extremely beneficial for both individuals and businesses. If you have thought about doing tax planning for a long time and don’t know where to start, now is a great opportunity! Please Contact our professional accountants and tax agents for an appointment!