Individual Tax Changes and Updates
Low and middle income tax offset now law
In the 2019/2020 Federal Budget the Government announced its intention to change and build on the Personal Income Tax Plan. These changes are now law.
From the 2018/2019 income year
The low and middle income tax offset increases from a maximum amount of $530 to $1080 per annum and the base amount increases from $200 to $225 per annumpayers with a taxable income
Taxpayers with a taxable income
Of $37,000 or below can now receive a low and middle income offset of up to $225
Above $37,000 and below $48,000 can now receive $225, plus amount equal to7.5% to the maximum offset of $1,080
Above $45,000 and below $90,000 are now eligible for the maximum low and middle income tax offset of $1,080
Above $90,000 but is no more than $126,000 are now eligible for a low and middle income tax offset of $1,080, less an amount equal to three per cent of the excess.
ATO set to introduce new Deductions schedule for claims at Items D1 to D15 of the 2019 ‘I’ return. The ATO has advised that, for the first time, it will be introducing a ‘Deductions schedule’ for the 2019 income year, for tax agent-prepared returns that are lodged electronically. The Deductions schedule will be a mandatory schedule that tax agents will need to complete when a claim is made on behalf of an individual client at Items D1 to D15 of the 2019 ‘I’ return. According to the ATO, the Deductions schedule will contain additional fields to assist tax agents to provide more information on deductions that are being claimed for individual clients. In particular, the Deductions schedule will effectively require tax agents to provide granular data for deductions in individual tax returns from 1 July 2019. For example, according to the ATO, for ‘other work-related expenses’ in the Deductions schedule, there will be additional repeating fields to record the individual descriptions and amounts of these expenses being claimed (e.g., a total amount claimed for ‘stationery items’).
Tax rates for resident individuals Tax Rate
2019 income year 2018 income Year
Tax 0% 0 – $18,200 0 – $18,200
Tax 19% $18,201 – $37,000 $18,201 – $87,000
Tax 32.5% $37,001 – $90,000 $37,001 87,000
Tax 37% $90,001 – $180,000 $87,001 – $180,000
Tax 45% $180,001 - Plus $180,001 - Plus
The tax-free threshold is effectively higher for those who qualify for the LITO (i.e., low income tax offset), the seniors and pensioners tax offset and certain other offsets. Also, the marginal tax rates outlined in the table exclude the Medicare levy of 2%.