Blog Layout

2019 tax changes for individuals

Stewart, Tracy & Mylon • May 11, 2019

WHAT THE TAX?!! 
2019 tax changes for individuals

As 30 June 2019 is fast approaching, we have briefly summarised the important tax changes to remember when collating your tax information.

Change for low income tax offset and LAMITO

A low and middle income tax offset (LAMITO) was introduced on 1 July 2018. The offset will run in conjunction with the low income tax offset as a targeted reduction of income tax for Australian residents.

The LAMITO provides an additional offset of up to $200 for individuals on a taxable income of $37,000 or less. Taxpayers up to $48,000 will get an increased LAMITO up to the maximum amount of $530.

The maximum LAMITO will be available for incomes up to $90,000, and will phase out for individuals with a taxable income of $125,333.

The LAMITO will be available for four years, ending with the 2021/22 income year. At this point, further income tax reductions will absorb the LAMITO.

Personal income tax cuts

For the 2018/19 income year, the top of the 32.5% tax bracket has moved from $87,000 to $90,000. That means that individuals above $90,000 in taxable income will save $135 in income tax this year compared to last year.

CGT main residence removal for foreign residents still not law

It was announced on 9 May 2017 that foreign residents would no longer have access to the CGT main residence exemption. Coupled with this, a grandfathering arrangement was in place where a foreign resident could still use the main residence exemption up until 30 June 2019.

However, at the time of writing, this legislation has not passed through parliament, meaning no changes have been made for individuals in this situation.

"Catch-up" superannuation contributions

Starting from 1 July 2018, the "catch-up" superannuation contributions rules apply. For the current income year (2018/19), individuals can carry forward unused amounts up to the concessional contributions cap of $25,000.

These rules are only in effect for individuals with a total superannuation balance of less than $500,000.

This means the balance as at 30 June 2019 for individuals wishing to make a "catch-up" concessional contribution in the 2019/20 financial year. Unused amounts can be carried forward for five years.

Individuals who anticipate an increase in income to a higher tax bracket in the 2019/20 financial year may wish to take advantage of a larger tax deduction.

Downsizer contributions now available

An individual who is aged 65 or over may make "downsizer contributions" from the proceeds of the sale of a dwelling that was the person's main residence, applicable to the proceeds from contracts entered into on or after 1 July 2018.

First home super saver scheme

Voluntary contributions up to $15,000 can be made by an individual who has yet to purchase their first home into their superannuation account. The scheme allows the individual to withdraw this contribution plus earnings in order to be used for a first home deposit.

Voluntary contributions made after 1 July 2018 may be used for withdrawal in the Scheme.

HELP repayment levels set to change

From 1 July 2018, students with a HELP debt may need to start repaying the debt on earning $45,000. This lower threshold is significantly lower than previous years ($51,957 in 2017/18), and is necessary for individuals who have become non-residents.

Insurance policies in super to become "opt-in"

Superannuation members who are inactive will need to "opt-in" with their life insurance and TPD providers from 1 July 2019 to retain their current policies.

Inactive members are individuals who have not had a contribution or roll-over into their account for 16 months. As at 1 July 2019, this will apply for accounts without a contribution or roll-over since 1 March 2018.

Work test exemption for low balance retirees

The work test has been removed for recently retired individuals, commencing 1 July 2019. Announced in the 2018 federal budget, this applies to voluntary superannuation contributions for individuals over 65 years of age.

For the first year in which an individual is greater than 65 years of age and does not meet the work test, a voluntary contribution may be made. However, this contribution will only be allowed if the individual met the work test in the previous year, regardless of whether they were under 65 years or not. Also, the member's total superannuation balance at the beginning of the year needs to be under $300,000.

Image rights to be included on individual returns only

The use of "public fame" or "image rights" in a third party entity was due to be removed from 1 July 2019. This meant that using image rights would be restricted to individual returns. However, this proposal from the 2018 federal budget has not become law.

Vacant land expenses no longer deductible for "build-to-rent"

Claiming tax deductions during a "build-to-rent" investment has been proposed to stop from 1 July 2019. This measure was announced in the 2018 federal budget, but is yet to become law.

A taxpayer may still be prudent to bring forward some payments, where possible, to claim a deduction this year. It is unconfirmed at the time of writing whether this announcement will be introduced into parliament in the future, still with the current expected start date.

Information sourced using CCH iknow


By Stewart, Tracy & Mylon 01 Apr, 2021
WHAT THE TAX?!! Shortcut to claiming work-from-home deductions in 2021 The ATO has reminded taxpayers about the temporary shortcut method still available to those claiming working from home deductions this year. Taxpayers that opt to use the shortcut can claim a rate of 80 cents per work hour at home for all working from home expenses. The temporary shortcut method can be used by multiple people living under the same roof and, unlike existing methods, does not require a dedicated work area. The shortcut is all-inclusive, meaning taxpayers cannot claim expenses under the shortcut method and then claim for individual expenses such as telephone and internet costs. The alternative existing methods are also available for a taxpayer to either: • claim a rate of 52 cents per work hour at home for the heating, cooling, lighting and cleaning of their dedicated work area and the decline in value of office furniture and furnishings; then calculate the work-related portion of their telephone and internet expenses, computer consumables, stationery and the decline in value of a computer, laptop or similar device, or • claim the actual work-related portion of all running expenses, which needs to be calculated on a reasonable basis. Irrespective of the method used taxpayers cannot claim: • personal expenses that are not directly related to earning income • expenses related to children's education • assets that cost over $300; these claims should be spread out over a number of years, and • occupancy expenses such as rent, mortgage interest, property insurance, land taxes and rates. All claims require the taxpayer to have not been reimbursed for money spent, the expense must be directly related to earning income, and the taxpayer must have kept the necessary records. Information sourced using CCH iknow
By Stewart, Tracy & Mylon 17 Oct, 2020
By Stewart, Tracy & Mylon 15 Oct, 2020
By Stewart, Tracy & Mylon 29 Sep, 2020
By Stewart, Tracy & Mylon 01 Aug, 2020
WHAT THE TAX?!!
By Stewart, Tracy & Mylon 21 Jul, 2020
By Stewart, Tracy & Mylon 27 Jun, 2020
By Stewart, Tracy & Mylon 22 Mar, 2020
By Stewart, Tracy & Mylon 17 Feb, 2020
By Stewart, Tracy & Mylon 04 Feb, 2020
More Posts
Share by: