Tax Changes Effective Today, 1 July 2009!
Increase in net take home pay
In the recent Federal Budget, the Government retained a previously announced tax rate reduction that takes effect today, 1 July 2009. In particular the tax rate on income between $80,000 and $180,000 has been reduced from 40% to 38%. The tax rates for the 2008/09 and the 2009/10 years are as follows:
| Old tax rates and thresholds (Applicable for 2008 / 09) | New tax thresholds (Applicable for 2009 / 10) | ||
|---|---|---|---|
| Threshold ($) | Rate (%) | Threshold ($) | Rate (%) |
| 0 – 6,000 | 0 | 0 – 6,000 | 0 |
| 6,001 – 34,000 | 15 | 6,001 – 35,000 | 15 |
| 34,000 – 80,000 | 30 | 35,000 – 80,000 | 30 |
| 80,001 – 180,000 | 40 | 80,001 – 180,000 | 38 |
| 180,000 + | 45 | 180,000 + | 45 |
Source: Australian Taxation Office
With lower interest rates, lower fuel prices and the recent Government stimulus packages, you may find you have some additional saving capacity to look forward to. If this is the case, don’t let it go to waste, talk to us about how you can use your money wisely to build wealth for the future.
Superannuation contribution caps halved
Despite the desperate need for individuals to continue to build their superannuation for their retirement needs, from today, 1 July 2009, the concessional contribution cap (ie. the cap on contributions for which a tax deduction can be claimed) will be reduced. For over 50s the cap reduces from $100,000 to $50,000 per year. For under 50s the cap reduces from $50,000 to $25,000.
If you have been working hard to maximise your super contributions you will need to reconsider these new limits. Please talk to us so that we can plan for the change as the cost of going over the limit is substantial. We may also need to look at other avenues and / or structures for build your wealth for retirement and to minimise your tax for this coming year.
Super co-contribution to be reduced
Many of you will have heard that the Government co-contribution has been reduced with effect from 1 July 2009. However it still remains an extremely attractive benefit which provides a guaranteed 100% tax free payment on retirement. I would encourage those eligible to continue to make their $1,000 contribution to super from their own funds (without claiming a tax deduction) as the Government will still match this amount (ie. contribute an additional $1,000 on your behalf) and you will be glad for every cent you have in super when the time comes.