2017 tax changes and updates for individuals and small business
For the 2017 financial year the marginal tax rate of 37 per cent starts at $87,000 instead of the $80,000. To benefit from this change your taxable income must be more than $80,000.
For more details on individuals tax rates please see Targeted personal income tax relief.
The Temporary Budget Repair Levy that was introduced from 1 July 2014 is now in its final year. The levy is payable at a rate of 2% of each dollar of a taxpayer's taxable income over $180,000. If the levy applies to your income, it will generally appear on your Notice of Assessment you receive after you lodge your 2017 tax return.
For those with rental properties, 2017 will be the final year of claiming a deduction for travel to or from the property for the purpose of inspecting, maintaining or collecting rent. This also applies to rental properties held by companies, trusts and other entities.
The income thresholds used to calculate the Medicare levy surcharge and the Private health insurance rebate remain frozen at the 2015 levels. Freezing the thresholds may result in individuals, whose incomes are just below each threshold, moving into a higher threshold sooner if their income increases. This means, if you:
- have Private Health Insurance, your rebate percentage entitlement may decrease
- do not have the appropriate level of private patient hospital cover, you may have to pay the Medicare Levy Surcharge
- paid the Medicare Levy Surcharge in the previous year, your rate may increase.
For more information on what's new for Individuals, see What's new for individuals on the ATO website (note this is updated annually).
From 1 July 2016, a range of small business tax concessions became available to businesses with turnover less than $10 million, this increase from the previous threshold of $2 million meaning more businesses are now eligible for most small business tax concessions.
For the 2017 income year the company tax rate for small businesses decreases to 27.5%, companies not entitled to the Small Business rate will remain at 30%.
The reduced company tax rate of 27.5% will progressively apply to companies with turnover less than $50 million by the 2019 income year. From 2025, the rate will reduce each year until it is 25% by 2027.
The $20,000 instant asset write-off threshold has been extended until 30 June 2018. This means if you are a small business, you can immediately deduct the business portion of most assets that cost less than $20,000
This deduction is used for each asset that costs less than $20,000, whether new or second-hand. You claim the deduction through your tax return, in the year the asset was first used or installed ready for use.
Read more about What's new for Small Business or to see the full list of concessions available to Small Business.