It’s Tax Time again!
It’s that time of year again – time to pull out all your tax records and do your tax return.
This edition of TaxWise outlines some tax changes for 2018-19 that should be considered by individuals when they are preparing their tax returns for 2018-19. There are also some tax tips and lodgement dates that taxpayers may find helpful when preparing their returns.
Tax changes for 2019
There have been some tax changes for individuals for 2018-19 in relation to:
- Low and middle income tax offset (LMITO);
- Downsizer contributions to superannuation;
- First Home Super Saver scheme (FHSS); and
- PAYG summaries (Group Certificates).
Low and middle income tax offset
In the 2019-20 Federal Budget, the Government announced it would increase the LMITO for the 2018-19 income year by increasing the base amount from $200 to $255 and the maximum amount from $530 to $1,080.
The ATO has indicated that taxpayers do not have to claim this offset. The ATO will work it out for taxpayers when their tax return is lodged.
The LMITO can reduce the amount of tax a taxpayer pays.
Downsizer contribution to superannuation
If you are selling your home, you should consider the superannuation downsizer contribution rules.
Subject to certain eligibility requirements, from 1 July 2018, individuals aged 65 years old or older may choose to make a downsizer contribution of up to $300,000 into superannuation from the proceeds of selling their primary residence.
The contract for the sale of their primary residence must be entered into on or after 1 July 2018.
There are certain reporting requirements that need to be complied with if an individual is making a downsizer contribution to superannuation.
Note! Age and work test restrictions do not apply to downsizer contributions.
First home super saver scheme
If an individual has requested the release of an amount under the FHSS scheme during the 2018-19 income year, the individual must include the following amounts in their 2018-19 tax return:
- any assessable FHSS amount; and
- the tax withheld amount.
Individuals will receive a payment summary from the ATO showing these amounts.
PAYG Summary (Group Certificates)
Many individuals will no longer receive a Payment Summary (Group Certificate) from their employer due to the introduction of Single Touch Payroll.
Individuals will find they have an ‘Income Statement’ through their myGov account. This is due to employers now reporting in real time through Single Touch Payroll. However, not all employers are reporting through this system yet. It only became compulsory for smaller employers from 1 July 2019.
Read our complete September 2019 Taxwise Individual Newsletter here