{"id":22,"date":"2016-08-18T05:54:37","date_gmt":"2016-08-18T05:54:37","guid":{"rendered":"http:\/\/www.trakaccountants.com.au\/wp-blog\/?p=22"},"modified":"2026-10-28T23:58:37","modified_gmt":"2026-10-28T23:58:37","slug":"affect-of-federal-budget-on-small-business-and-individuals","status":"publish","type":"post","link":"https:\/\/www.trakaccountants.com.au\/blog\/affect-of-federal-budget-on-small-business-and-individuals\/","title":{"rendered":"AFFECT OF FEDERAL BUDGET ON SMALL BUSINESS AND INDIVIDUALS"},"content":{"rendered":"<p>With the close of the 2015\/16 Financial Year and the Coalition forming government for another term, we thought it an ideal time to take a look at what the recent budget means for small business and individuals.<\/p>\n<h2>Key changes for individuals<\/h2>\n<ul>\n<li>The second-highest marginal tax bracket threshold has been increased from $80,001 to $87,001 to address wage inflation.\u00a0 Approximately 500,000 taxpayers won\u2019t enter the 37% tax bracket until 2019-2020 income year.<\/li>\n<li>No changes proposed for tax deductions for work related expenses.<\/li>\n<li>Medicare levy rate to remain at 2% of taxable income.<\/li>\n<li>Medicare levy low-income thresholds have been increased for singles, families and single seniors and pensioners.\u00a0 This is to ensure low-income taxpayers don\u2019t have to pay the Medicare Levy.\u00a0 Individuals have increased to $21,335 and families to $36,001.<\/li>\n<li>No changes to \u2018Negative Gearing\u2019.<\/li>\n<li>If you are &lt;75 years of age you can claim a deduction for personal superannuation contributions \u2013 no need for salary sacrifice arrangements.<\/li>\n<li>Threshold for high-income earners reduced from $300,000 to $250,000 for requirement to pay additional 15% tax on Concessional Superannuation Contributions.<\/li>\n<li>The Spouses Income Threshold to claim a tax offset of $540 for low-income spouses, has been increased from $10,800 to $37,000.<\/li>\n<li>Low-income earners will receive a tax offset to their super fund to compensate for tax paid on super contributions.\u00a0 Up to a $500 non-refundable tax offset where concessional contributions have been made where taxable income is less than $37,000.<\/li>\n<\/ul>\n<h2>Key changes for small to medium business<\/h2>\n<ul>\n<li>Corporate tax rate to reduce to 25% for all companies over the next 10 years, with businesses with annual aggregated turnover of less that $10 million reducing to 27.5% this financial year.<\/li>\n<li>Small business entity turnover threshold has increased from $2 million to $10 million.\u00a0 All businesses within this threshold will be able to:\n<ul>\n<li>Claim the immediate deduction for depreciable asset purchases costing less than $20,000 until 30 June 2017.\u00a0 Beware thought; if this results in a tax loss, there is no immediate cash-flow advantage.<\/li>\n<li>Avoid end of year stocktake if value of stock has changed by &lt;$5,000.<\/li>\n<li>Use a simplified method of paying PAYG instalments that removes risk of under or over-estimating and the penalties that may be applied.<\/li>\n<li>Take the option to account for GST on a cash basis<\/li>\n<li>Use a simpler BAS.<\/li>\n<\/ul>\n<\/li>\n<li>Businesses &lt;$2million turnover threshold will retain access to small business capital gains tax concessions.<\/li>\n<li>Access to unincorporated small business tax discount will be limited to entities with turnover less than $5 million.<\/li>\n<li>Top-up tax payable when private company profits are distributed to shareholders will increase as a result of the corporate tax rate changes. \u00a0Consider tax profile of shareholders and their capacity to frank dividends when considering annual dividend strategies.<\/li>\n<li>Overseas suppliers that have an Australian turnover greater than $75,000 will be required to register for, collect and remit GST on the sale of low value goods to Australian consumers.<\/li>\n<\/ul>\n<p>If you have any questions about how these changes affect your or your business, or need more details please don\u2019t hesitate to contact our office.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>With the close of the 2015\/16 Financial Year and the Coalition forming government for another term, we thought it an ideal time to take a look at what the recent budget means for small business and individuals. Key changes for individuals The second-highest marginal tax bracket threshold has been increased from $80,001 to $87,001 to<a class=\"blog-more\" href=\"https:\/\/www.trakaccountants.com.au\/blog\/affect-of-federal-budget-on-small-business-and-individuals\/\">Read More \u00bb<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"cybocfi_hide_featured_image":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[12,10,13],"tags":[],"class_list":["post-22","post","type-post","status-publish","format-standard","hentry","category-getting-organised","category-news","category-technology"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>AFFECT OF FEDERAL BUDGET ON SMALL BUSINESS AND INDIVIDUALS - Tax Accountants Varsity Lakes &amp; Robina<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.trakaccountants.com.au\/blog\/affect-of-federal-budget-on-small-business-and-individuals\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"AFFECT OF FEDERAL BUDGET ON SMALL BUSINESS AND INDIVIDUALS - Tax Accountants Varsity Lakes &amp; Robina\" \/>\n<meta property=\"og:description\" content=\"With the close of the 2015\/16 Financial Year and the Coalition forming government for another term, we thought it an ideal time to take a look at what the recent budget means for small business and individuals. 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