Each year on July 1, the government changes a bunch of rules related to tax and finance. Some of those changes only affect a small number while others are far more wide-reaching. Here are five of the biggest things that come into affect today.
Child care subsidies rate
The government has adjusted the income levels required for child care subsidies.
The new rates are:
|Up to $68,163||80%|
|$68,163 to $173,163||Between 85% and 50%; the percentage goes down by 1% for every $3,000 of income your family earns|
|$173,163 to $252,453||50%|
|$252,453 to $342,453||Between 50% and 20%; the percentage goes down by 1% for every $3,000 of income your family earns|
|$342,453 to $352,453||20%|
|Over $352,453||0%; no subsidy|
Income tax levels and thresholds
The jury has still out on exactly what changes will occur on as the government and opposition are still debating who will get what and when but the Federal budget that was handed down in May proposed the following.
- The low and middle-income earners will see a reduced tax amount up to $1,080 per annum
- Taxpayers with a taxable income of less than $37,000 will receive a benefit up to $255
- If the taxable income is between $37,000 and $48,000 you are entitled to receive $255, plus an amount equal to 7.5% to the maximum offset of up to $1,080
- Taxpayers with a taxable income between $48,000 and $90,000 will now be eligible for the tax offset of $1,080
You won't have to specifically claim any offsets as they'll be calculated and paid when you submit a tax return. As the changes, assuming they're all passed, take effect today, the Australian Taxation Office will retrospectively implement these tax cuts so you won't miss out as parliament hasn't yet sorted things out.
Single touch payroll is now on for all businesses
Single touch payroll is now live for all business operators, m regardless of size.
From 1 July 2018, if your business has 20 or more employees, you'll need to report employees tax and super information to the Australian Taxation Office (ATO) through payroll software works with their new Single Touch Payroll (STP) system. The move, which the ATO says will greater transparency and connect businesses to the ATO through their existing software.
Basically, rather than reporting on payroll and super every month or quarter, businesses will now report to the ATO at each pay cycle. Hopefully, you've been on the ball and your accounting software has all this under control.
Lodging your tax return
It's been a while since group certificates were replaced with patent summaries. Now, payment summaries don't have to be issued as the way employers report tax and super information to the ATO is changing. Instead, you'll need to log into MyGov to this information. If you have a tax agent, they'll have this information and can use it to pre-fill your tax return.
Health insurers are no longer required to send you a private health insurance statement as they';ll be sending it directly to the ATO by 20 July.
Family tax benefit changes
The FTB Part A higher income free area has increased from $94,316 to $98,988 from today. No further changes are expected until 1 July 2021. There are no expected increases to the FTB Part B primary earner income limit until 1 July 2021.
The Department of Human Services also says that from 10 June 2019, they'll withhold family tax benefit payments in order to recover debts such as when you're in arrears, have received lump sums or top ups and supplements. Previously these payments were only used to recover family assistance debts. This change means FTB payments can be used to recover other Centrelink debts you may have. Interestingly, they’ll do this even if you have a payment arrangement in place.