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2017 Tax Changes – What’s New?

Article By Adam Hurwood | | Accounting & Tax
$20,000 Immediate Asset Write-off for Small Business

The accelerated depreciation for small businesses provisions have been around since the previous 2015/2016 budget and will continue until 30 June 2017. These provisions allow a small business with an annual turnover of less than $2 million an immediate write-off on assets purchased under the value of $20,000. In addition, the balance of the general small business pool can also be deducted if less than $20,000.

Company Tax Cut for Small Businesses

Already, the small business company tax rate has been reduced 28.5% for the 2016 financial year. If proposed legislation is passed, the small business corporate tax rate will further reduce to 25% by the end of 2026.

Small Business Tax Offset

From 1 July 2016, individual business owners may receive a small business tax offset. The tax offset will reduce the tax payable on small business income by up to $1,000. Small business income includes income from either a sole trader or share from a partnership or trust.

Small Business Restructure Rollover

From 1 July 2016, capital gains rollover relief is available for small businesses restructuring their business. This means that a taxpayer can defer a capital gain when restructuring their business to another entity. There are certain eligibility requirements, so please contact your Altitude Adviser to discuss whether a restructure may be advantageous to you.

Simplified Work Related Motor Vehicle Expenses

The government has simplified the car expense deductions for 2016 and future income years. From 1 July 2015, work related motor vehicle expenses can be calculated by using either the cents per kilometre method for travel up to 5000 kilometres or the log book method. Interestingly, the ATO have simplified the cent per kilometre rate to a flat 66 cents per kilometre. This was previously as high as 76 cents for large motor vehicles.

Abolished – Out of Pocket Medical Expense Offset

From 1 July 2016, individuals claiming the out of pocket medical expenses offset is restricted to disability aids, attendant care or aged care. Other medical expenses such as doctors bills and prescriptions are no longer claimable.

Major superannuation changes proposed in the 2016 federal budget are yet to be passed by parliament and are proposed to take effect from 1 July 2017. Please stay tuned to future Altitude Freedom News for updates on these changes.