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Time for some Tax Refreshes and Updates

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Low Value Assets:

Low value assets are those that currently cost up to $1,000 exclusive of GST.  If you are not registered for GST then the $1,000 cost is inclusive.

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Low value assets are fully expensed when they are purchased and do not need to be depreciated over several years.  If you purchase multiple assets from the same supplier at the same time and the total cost of the invoice exceeds $1,000, all the assets will still need to be added to your asset schedule and depreciated.  It does pay to be mindful of this when considering asset requirements.  You may be able to take advantage of the low value rule by keeping your purchases under the threshold – buy some now and some more next week and all will be expensed.  An exception to this total invoice rule is if the purchase is for different assets that attract different depreciation rates.

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You need to be mindful of multiple invoices that contribute to only one asset.  For instance, if you managed to buy an asset for $1,000 but then paid $200 freight to get it to your place of work and a further $500 to get it installed, then the total cost of that asset would become $1,700 and would not qualify for immediate write-off.

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Independent Earner Tax Credit (IETC):

From 31 July 2024, the IETC will be available to eligible individuals with total taxable income between $24,000 and $70,000 per annum.   The full entitlement of $20 per fortnight ($520 a year)  will apply up to $66,000 with gradual abatement up to $70,000. Currently the credit is only available for those earning between $24,000 and $48,000 per annum.

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If you are a salary and wage earner, you can get the IETC during the year by choosing the tax code ME.  Other income earners that qualify will claim the credit when we file your tax return.

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Change in Income Tax Brackets for Individuals:

From 31 July 2024, personal income tax thresholds will increase.  The tax below sets out the current brackets and the new brackets.  This will have the effect of reducing the total tax payable on your taxable income.

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Current brackets $               New Brackets $                     Rate

0-14,000                                   0 – 15,600                                10.5%

14,001 – 48,000                       15,601 – 53,500                       17.5%

48,001 – 70,000                       53,501 – 78,100                       30.0%

70,000 – 180,000                     78,101 – 180,000                     33.0%

180,000 +                                 180,000 +                                39.0%

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If you have any questions, please get in touch with one of the team, as we are here to help!

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