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2023 Federal Budget Tax Updates

2023 Federal Budget Tax Updates

Presenting you the latest Federal Budget Tax Updates 2023! All those young money wizards, your wait has come to an end! In this blog post, we will try to blend our expertise on Australian tax matters with a unique sense of creativity and present you with a truly distinctive perspective. So, grab your magnifying glass and let’s explore the fascinating world of tax changes together.

Tax Rates and Threshold Adjustments

In the latest 2023 Federal Budget, you will find several noteworthy changes to tax rates and thresholds. All of them are designed to support economic growth and also ensure fairness across various income levels. First things first. There are no changes to any personal tax rates or thresholds in 2023-24.

The Resident rates and thresholds for 2023-24 are as follows:

Taxable Income up to $18,200

Nil

Taxable Income up to $18,200 to $45,000

19% of excess over $18,200

Taxable Income up to $45,100 to $120,000

$5,092 plus 32.5% of excess over $45,000

Taxable Income up to $120,001 to $180,000

$29,467 plus 37% of excess over $120,000

Taxable Income of more than $180,001

$51,667 plus 45% of excess over $180,000

Non-resident tax rates and threshold for 2023-24

$0-$120,000

32.5%

$120,001-$180,000

37%

$180,001 and over

45%

The government has implemented a reduction in the marginal tax rate for low and middle-income earners. It has managed to offer a breather for those striving to make ends meet. All these adjustments are expected to alleviate the tax burden on Australian households and encourage increased spending power.

Superannuation Reforms

Common to the importance of retirement savings, the government has introduced a few reforms to the superannuation system. All of these are aimed to boost the financial security of future retirees. All the super has to be paid on employees’ payday from 1 July 2026. ATO will also consult with stakeholders in the second half of 2023 to discuss these changes. Thereafter, the final design will be considered as a part of the next forthcoming budget. 

The interim 50% cut in the minimum annual payment levels for superannuation pensions will not be extended, according to the government. This 50% reduction which was applied for 2019-20, 2020-21 and 2021-22-, and 2022-23-income years will end on 30 June 2023. In short, measures have been taken to simplify the superannuation system. 

Small Business Initiatives

To foster innovation and entrepreneurship, the 2023 Federal Budget introduces a range of measures specifically targeted at small businesses. In this regard, the government has established a $20,000 quick asset write-off barrier from July 1, 2023, until June 30, 2024.

So small businesses that have an annual turnover of less than $10 million can deduct the entire cost of eligible assets costing less than $20,000 which is first used or installed and ready to be used between 1 July 2023 and 30 June 2024. This threshold limit can be applied on a per-asset basis. Now, assets worth $20,000 or more can be classified as small company assets and depreciated at 15% in the first income year and 30% in each consecutive income year. 

Conclusion 

The 2023 Federal Budget ushers in a range of tax updates and amendments. Some of the key highlights include the adjustment including adjusted tax rates and thresholds, superannuation reforms, small business initiatives, and more! It can difficult to navigate the complex tax reforms and at times can land you in trouble. And if you require any clarification or require deeper insights on navigating the latest 2023 Federal Budget Tax Updates, you can simply contact KPG Taxation which is a leading tax consultant in Australia. It has got expert tax agents who are well-versed with the latest tax update and can help you lessen your taxation burden.

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