The 2016/17 Federal Budget has recently been revealed this week.
This budget reflects an exciting time for small businesses with lower tax rates resulting in more cash flow being available for investment & expansion. This should flow on to allow local businesses to be more competitive against overseas products & services.
Below is a summary to help see what areas of the budget will effect small business & individual taxpayers.
2015/16 Financial Year
- Medicare Levy low income threshold raised to $21,335 for individuals & $36,001 for families.
- Full tax exemption for Australian Defence Force personnel deployed on Operation Palate II
2016/17 Financial Year
- From 1 July 2016 the 32.5% personal income tax threshold has been raised from $80,000 to $87,000
- The company tax rate will be cut to 27.5% for small businesses
- Increasing the small business entity turnover threshold from $2m to $10m (allowing more businesses to claim the $20,000 immediate deduction for assets)
- Increasing the current small business income tax discount from 5% to 8%
2017/2018 Financial Year
- Reducing the annual concessional contributions cap to $25,000 (currently $30,000 for those aged under 50 & $35,000 for those aged 50 years and over)
- Division 293 threshold reduced to $250,000 for high income earners.
Should you wish to discuss how the above budget changes affect your personal situation, please do not hesitate to contact our office.