A standard deduction of $500 for the 2012/13 income year will be made optional in lieu of employment deductions and tax agents fees. This deduction increases to $1,000 for the 2013/14 income year.
Although I am sure this will sound appealing to some taxpayers, it is far from beneficial for most.
According to Tax Office statistics, the average claim just for work-related expenses $1,920 - even higher if you are entitled to travel deductions. Add this to the $301.31 claimed on average for managing tax affairs and a standard $500 doesn’t sound so hot. And where will this leave other entitlements and deductions such as the ETR, medical, donations, etc… ? More than ever, taxpayers need to inform themselves and know what they can claim on their taxes.
There is no doubt that some individual taxpayers will benefit a great deal from a standard deduction, such as those with very simple affairs and little to deduct or claim. Unfortunately, it is not a very generous ‘standard’ for most of us.
The Federal Treasurer, Mr Wayne Swan, presented the Rudd Government’s budget on 11th May 2010. The Treasurer indicated the budget was a “no frills budget” and it was. This series of posts incorporates a summary of matters within the Federal Budget, the Henry Review and other initiatives that have commenced in 2010 that may affect SME operators. Other than those items which have already commenced in 2010, none of the items contained within the budget, nor the Henry Committee Review, will become law until the budget and the various Henry Committee Review recommendations have been passed by the House of Representatives and the Senate, and signed by the Executive Council.
Article by Christie Lewis
Christie is Practice Manager at Alan Lewis Accountants . Besides accounting, her passion is for all things small business (and blogging, of course). You can contact Christie directly at christie@lewistaxation.com.au.
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