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20 Jun Client Alert – Tax Cuts 2024/2025

Posted at 11:09h in Announcements by

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Changes to Australian Income Tax in 2024/25

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The Australian Government has recently announced significant changes to income tax rates and thresholds for the 2024/2025 financial year. These adjustments aim to provide tax relief and stimulate the economy. However, it’s crucial for taxpayers to understand how these changes will affect them.

What’s Changing?

Here’s a breakdown of the key changes set to take effect from 1 July 2024:

  • Reduced tax rates: The tax rate on income between $18,201 and $45,000 will decrease from 19 cents to 16 cents per dollar, and the rate on income between $45,001 and $120,000 will decrease from 32.5 cents to 30 cents per dollar.
  • Increased tax thresholds: The income threshold for the 37-cent tax rate will increase from $120,000 to $135,000, and the threshold for the 45-cent tax rate will increase from $180,000 to $190,000.

Implications for Taxpayers

These changes will have varying impacts depending on your income level. For example, an individual earning $90,000 per year could potentially see a tax reduction of $1,929 annually compared to the 2023-24 financial year. It’s important to note that these are just estimates, and your individual circumstances may vary.

Additional Resources

For further details about the tax cuts, we encourage you to visit the Australian Government’s official website: https://taxcuts.gov.au/

Tax Cut Calculator

The government website also features a tax cut calculator that you can use to estimate your potential tax savings. Simply input your annual taxable income for a quick estimate.

What If I Own a Business?

Business owners need to be aware of their obligations regarding Pay As You Go (PAYG) withholding tax. Ensure you are withholding the correct amount from your employees’ paychecks based on the new tax rates. If you have any questions or need assistance, Finkelstein Hickmott can provide guidance on PAYG withholding obligations. Additionally, if your business is unincorporated and your income is taxed under individual income tax rates, you’ll also benefit from these tax cuts.

How Can Finkelstein Hickmott Help You?

Finkelstein Hickmott’s team of experienced tax professionals is here to guide you through these changes and ensure you are maximising your tax benefits. We can:

  • Analyse your individual tax situation to determine the specific impact of the tax cuts on your personal tax liability.
  • Provide tailored tax planning strategies to help you optimise your tax position in light of the new regulations.
  • Assist with tax compliance to ensure your tax returns are accurate and comply with the latest laws.
  • Offer representation and support if you encounter any tax-related issues.

Important: Clients should not act solely on the basis of the material contained in Client Alert. Items herein are general comments only and do not constitute or convey advice per se. Also changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of the areas. Client Alert is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our prior approval.