This year may be quite different considering the tax changes that have and will be implemented. It is best to be acquainted and informed about these to avoid being sanctioned by the IRS as well as to better know one’s rights.

Here are some of the Tax Changes business owners as well as accountants have to know.

1. Cutting income tax and setting free over a million people from having to file their income tax return.

The tax free threshold will now be raised by the Australian government to $18,200. Doing so will free over 1 million people from having to file their income tax return. Furthermore, this will also make it easier for low-income earners who presently need to interact with the tax system.

Additionally, by 2015-2016, the tax free threshold will also be increased to $19,400 and free another 100,000 people from filing their income tax return.

2. Reduce complexity and increase transparency in the current tax system.

By July 1 this year, the government will cut the marginal tax from 4 percent to 1.5 percent. Furthermore, they will increase the threshold so it can only be applied to those who earn about $37,000. And come 2015, a further cut to 1 percent will be made by the government.

Here are some key facts in the said Tax Changes.
  • The free tax threshold will be increased from $6,000 to $18,200 which is a three-fold change.
  • The higher statutory tax free threshold encourages better interactions with the transfer system. It also allows people to have a greater take-home pay for every week.
  • A reduction from $1,500 to $445 will be applied on the Low-Income Tax Offset (LITO).
  • By 2015-2016, an increase from $1,200 to $19,400 will be seen on the tax free threshold. This will make those who earn $68,000 get $385 tax cut per year.

Such changes will prove beneficial to Australians. And for the business owners and accountants, they have to be ready with their balance and spreadsheets to accommodate such changes. That is why they should use an online accounting software in order to be at par with the rest in the business world.


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