Federal Budget Taxpayer overview

Overall in terms of lower taxes, it’s good news.

In this Federal Budget , the Government is delivering an additional $17.8 billion in personal income tax relief to support the economic recovery, including an additional $12.5 billion over the next 12 months. It builds on the $8.1 billion in tax relief that will be delivered for the 2020‑21 income year under the already legislated Personal Income Tax Plan.

It was announced that working individuals will get a tax cut and it will also be backdated to 1 July 2020.  There is also a one-off additional benefit for the low and middle-income tax offset in 2020-21.

For middle income earners, this means:

The 19 per cent tax rate threshold increases from $37,000 to $45,000

The 32.5 per cent tax rate threshold increases from $90,000 to $120,000

How much income tax will you save?

If your yearly taxable income totals:

  • $50,000 a year, you will get a tax reduction of $1080
  • $90,000 a year, you will get a tax reduction of $1215
  • $120,000 a year, you will get a tax reduction of $2565

Low and Middle-Income Tax Offset

In addition, the Low and Middle -Income Tax Offset has been extended until 30 June 2021, which means that eligible individuals earning between $48,000 and $90,000 a year, will get $1080 and dual income couples will get $2160.

For those earning between $37,001 – $47,999, they will have tax relief from between $255 to $1080, and anyone who earns up to $37,000 will have their tax reduced by up to $255. This is a one-off extra when you file your tax return next year and received as a lump sum on assessment.

You can download the ‘Lower Taxes’ fact sheet which includes useful scenario examples, from our downloads section here

For a full de-brief of the Budget 2020 Overview visit here 

If you have any questions about about the Federal Budget as a taxpayer, please don’t hesitate to get in touch.

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