Tax cuts are coming: What it means for you

By Our Reporter
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Pic supplied / CultureVerse

As Australians grapple with the mounting pressures of the cost of living, the Australian Government has taken decisive action by implementing changes to individual income tax rates and thresholds, offering relief to taxpayers across the nation.

Effective from 1 July 2024, every taxpayer in Australia will benefit from a tax cut, aimed at easing financial burdens and ensuring individuals retain more of their hard-earned income.

Tax cuts serve to reduce the amount of tax payable by individuals, translating into tangible savings for households on each pay day. An illustrative example of these changes reveals that Priya, a registered nurse residing in regional Australia, will enjoy an annual tax cut of $1,929 in the 2024-25 financial year, based on her salary of $90,000. This represents a significant reduction from the $21,517 she paid in income tax, including the 2 per cent Medicare levy, in the preceding financial year.

In Australia, the extent of income tax payable is contingent upon one’s annual taxable income, with higher earnings correlating to a greater tax liability. Consequently, the tax cuts aim to provide relief across various income brackets, with the ultimate goal of enhancing financial resilience and prosperity for all Australians.

While many taxpayers will witness the impact of these cuts reflected in their take-home pay on a regular basis, others will realise the benefits upon lodging their tax returns after the conclusion of the 2024-25 financial year.

It’s important to note that tax cuts differ from tax refunds, with the latter representing excess tax payments refunded by the Australian Taxation Office (ATO) upon the submission of tax returns.

To ascertain the extent of their annual tax cuts, individuals can utilize the user-friendly tax cut calculator, available in 14 languages, accessible via the website www.taxcut.gov.au/languages. By simply inputting their annual taxable income, taxpayers can estimate their annual tax savings. However, it’s essential to recognise that the calculator provides an estimated figure, and actual outcomes may vary.

For further information regarding the tax cuts or to access the tax cut calculator, visit www.taxcut.gov.au/languages, empowering Australians with the tools and resources to navigate the evolving landscape of taxation and financial management.

(CultureVerse)


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