We are now 6 months into the 30 June 2013 financial year and we are starting to see a lot more talk about the change to the tax-free threshold this year.
In past years, the tax-free threshold was $6,000. Most people remember that pretty well, it meant you could pay an employee about $115 and not worry about having to withhold tax.
There was also a low-income tax offset that boosted this up to around $15,000 before a normal taxpayer was actually required to pay any tax.
This has changed now for the year ended 30 June 2013 and it seems to be a lot easier to explain and apply now.
The tax-free threshold for a normal taxpayer is now $18,200. This equals $350 a week that can be paid and no tax to be withheld. There is also a smaller low-income tax offset which boosts this up to around $20,540.
For a number of people, usually the non-working spouse, the strategy was employed to make sure you earned around $6,000-$10,000 a year in passive income. The strategy should be reconsidered. You could target $20,000 of income in your own name from passive investments now.
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Email: mail@jaccam.com.au
