 |  | | | | | Individual Tax Bulletin - July 2008 | | | | | | | | | Here is a summary of some of the personal taxation and benefit changes announced in the 2008 Federal Budget.You should always check to make sure you know the exact outcome of a Budget proposal before you change the way you currently manage and organise your personal dealings. |  | | | | | | The proposed rates and tax payable from 1 July 2008 for resident taxpayers are as follows: | | | | | Residents: proposed rates and tax payable from 1 July 2008 | | Taxable income ($) | Tax payable ($) | | 0 - 6,000 | Nil | | 6,001 - 34,000 | Nil + 15% of excess over 6,000 | | 34,001 - 80,000 | 4,200 + 30% of excess over 34,000 | | 80,001 - 180,000 | 18,000 + 40% of excess over 80,000 | | 180,001+ | 58,000 + 45% of excess over 180,000 | | | | | | | The current and proposed personal tax rates and thresholds for resident individuals (excluding the 1.5% Medicare levy) are (with key changes highlighted in bold): | | | | | Residents: Personal tax rates and thresholds | | Current | From 1 July 2008 | | Taxable income | Rate | Taxable income | Rate | | ($) | (%) | ($) | (%) | | 0 - 6,000 | 0 | 0 - 6,000 | 0 | | 6,001 - 30,000 | 15 | 6,001 - 34,000 | 15 | | 30,001 - 75,000 | 30 | 34,001 - 80,000 | 30 | | 75,001 - 150,000 | 40 | 80,001 - 180,000 | 40 | | 150,001+ | 45 | 180,001+ | 45 | | Low income tax offset | | 750 | 1,200 | | | | | | Offsets and Thresholds Increased | | | | From 1 July 2008, taxpayers will be entitled to the low income tax offset (LITO) if their taxable income is less than $60,000. The LITO will increase from $750 to $1,200 and will continue to phase out from $30,000. Taxpayers eligible for the full LITO will not pay income tax until their annual income exceeds $14,000 (up from $11,000). As a consequence of the increase in the LITO, the tax free income threshold for senior Australians (eligible for the senior Australians tax offset) will also increase. From 1 July 2008, singles will have no tax liability until their incomes reach $28,867 and for each member of a couple $24,680. The Treasurer announced that the 1% Medicare levy surcharge threshold for singles would increase from $50,000 to $100,000, and for a family from $100,000 to $150,000, with effect from 1 July 2008. Eligibility for the dependency tax offsets has been targeted so that those earning more than $150,000 will not be entitled to claim the dependent spouse, housekeeper, child-housekeeper, invalid relative and parent/parent-in-law tax offsets, with effect from 1 July 2008. This threshold will be indexed. Child Care Tax Rebate will increase from 30% to 50% from 1 July 2008. The maximum out-of-pocket expenses claimable will increase from $4,354 to $7,500 (indexed) per child per year. This will be paid quarterly instead of annually, with families receiving the first quarterly payments from October 2008 direct from Centrelink. From 1 July 2008, an income test will be introduced so that Family Tax Benefit Part B will only be available to families where the annual adjusted taxable income of the principal earner does not exceed $150,000. The income test will be indexed annually by the consumer price index. | | | | | | | Families receiving Family Tax Benefit Part A with children undertaking primary or secondary studies or whose school children receive Youth Allowance or another relevant payment will be eligible for an education tax refund. The refundable tax offset will apply to expenses incurred from 1 July 2008 and will be claimed upon lodgment of a 2008-09 income tax return. Eligible families will be able to claim a 50 per cent refund every year for key education expenses up to $750 for each child undertaking primary studies (maximum refundable tax offset of $375 per child, per year) and $1500 for each child undertaking secondary studies (maximum refundable tax offset of $750 per child, per year). | | | | | | |
