2010 Budget - Personal Finance Summary
2010 Budget - Personal Finance Summary
To download a printable copy of this information please click on this link. The budget has provided a number of significant changes impacting on financial planning strategies. These have been outlined in this summary. The major changes include:
- Confirmation of income tax changes from July 1st 2010 increasing the effective tax free threshold from $15,000 to $16,000 for those earning $30,000 or less, the bottom of the 30% marginal tax rate threshold increasing from $35,000 to $37,000 and the current 38% marginal tax rate being reduced to 37%.
- A 50% discount commencing July 1st, 2011 on the tax payable on the first $1,000 of interest income generated by bank, credit union and building society accounts along with income from bonds, debentures and annuity products.
- A $500 standard deduction for work related expenses starting 2012-13, increasing to $1,000 for 2013-14 to simplify tax returns and lead to tax savings for many individuals.
- Superannuation guarantee contributions to rise from the current 9% to 12% by July 2019.
- A $500 superannuation tax rebate, commencing July 1st, 2012, of the contributions tax for those with incomes of up to $37,000.
- Superannuation co-contribution matching rate from the government to remain at 100% up to a maximum of $1,000 p.a.
- The superannuation guarantee age limit to rise from 70 to 75 starting July 1st 2013.
- A reduction in the company tax rate from 30% to 29% in 2013-14 and 28% in 2014-15.
- The company tax rate reductions to be brought forward for small businesses with the rate of 28% applicable from 2012-13.
- Small businesses to be able to immediately write off asset purchases of less than $5,000 compared to the current limit of $1,000.
- A permanent extension from 1st July 2012 of the eligibility for those over 50 to receive $50,000 of concessional contributions into super p.a. as long as superannuation balances do not exceed $500,000.
- The Net Medical Expenses Tax Offset to increase from $1,500 to $2,000
Summary of Major Strategy Considerations
In a nutshell these are the possible strategy modifications arising from this year’s budget:
This document has been prepared as a brief summary of the 2010 Federal Budget as it impacts on personal finances. It is a publication of A Clear Direction Financial Planning. It contains general financial information. Readers should check this information with a professional financial adviser before acting on any of the material contained in this document. |