The new Federal Budget highlights the retention of ‘LMITO’ (Low and Middle Income Tax Offset).
The LMITO is a vital tax rebate for Australians that offers relief to low and middle income taxpayers. This scheme has been an add on to the ‘LITO’ Low Income Tax Offset that’s already in place.
Government’s intention is to retain the LMITO program for an additional year to be included in the 2022 income year. In contrast to the current legislation that required LMITO to be removed from 1 July 2021.
For more information regarding where you sit on the LMITO range, get in touch with our friendly team at Zimsen Partners.
Furthermore, the Government has initiated an increase in the Medicare levy low-income thresholds for singles, families and senior and pensioners for the 2021 income year.
Few additional changes under this subsection of the Federal Budget 2021/2022 include:
- Introducing a modernised framework in place of the current individual tax residency rules.
- The Government has removed the exclusion of the first $250 of deductions for prescribed educational courses.
- The ‘cessation of employment’ point of taxing for Employee Share Schemes (ESS) will be removed.
Moving further, we discuss changes affecting the business taxpayers:
- In the 2021/22 Federal Budget, the Government has announced that temporary full expenses will be extended by 12 months to allow eligible businesses with aggregated annual turnover or total income of less than $5 billion to deduct the full cost of eligible depreciable assets of any value.
- The above eligibility also applies to the Governments measure regarding loss carry-back measure which will be extended for these companies.
- In order to support Australia’s journey to being a digital economy by 2030, the Government will provide $1.2 billion over six years from 2022 for the Digital Economy Strategy.
- In addition, debt recovery for small businesses and tax treatment for qualifying storm and flood grants are being provided.
Superannuation related changes in the Federal Budget 2021/22:
- The removal of the work test for voluntary contributions.
- Downsizer contributions will be having their age limit reduced.
- Removing the $450/month threshold for Superannuation Guarantee ‘SG’ eligibility.
- Relaxing the residency requirements for SMSFs (Self Managed Superannuation Funds)
- Individuals will be given an option to exit and convert from a specified range of legacy retirement products.
- Changes to the First Home Super Saver Scheme to include increasing the maximum releasable amount to $50,000 and further changes to improve the operation of the scheme.
To find out more about how the changes affect you as a business or an individual, please contact our friendly experts at Zimsen Partners.