What's New in Tax 2024 | Gotax Online

What's New in Tax for 2024: A Guide for Individual Taxpayers

The 2024 Income Tax Return changes are minimal, with no significant tax adjustments for the average wage earner. However, there are notable updates in record keeping and several tax policy changes. The Australian Taxation Office (ATO) emphasizes the importance of maintaining adequate records, and the GoTax Deduction Grabber App simplifies this process—just scan the QR code to upload to your phone.

Index

1. Stage 3 Tax Cuts
2. Changes to Deductions
3. Reporting Requirements
4. Audit Focus
5. Superannuation Changes
6. Conclusion

Stage 3 Tax Cuts

One of the most significant changes for individual taxpayers is the introduction of the Stage 3 tax cuts, effective from 1 July 2024. These cuts will provide a permanent reduction to the marginal tax rates for individuals with taxable incomes up to $190,000. The key changes are:

• The 32.5% tax bracket will be reduced to 30%.
• The 37% tax bracket will be abolished.
• The top marginal tax rate of 45% will apply to incomes over $200,000 (up from $180,000).

Changes to Deductions

Several changes have been made to deductions that individual taxpayers can claim:

Energy Efficient Asset Deduction

There is a new bonus deduction available for individuals who purchase energy-efficient assets. This incentive is part of the government’s push towards sustainability and will be available for most taxpayers.

Simplified Depreciation Rules

Individual taxpayers running small businesses can benefit from the increased instant asset write-off threshold, which has been temporarily raised to $30,000 for the 2024 income year. This applies to assets first used or installed ready for use by 30 June 2024.

Reporting Requirements

The ATO has introduced new reporting requirements aimed at improving compliance and targeting audit activities more effectively:

Income Reporting

Enhanced income reporting requirements ensure all sources of income are accurately reported. This includes income from gig economy activities, foreign income, and cryptocurrency transactions.

Expense Reporting

There are stricter guidelines on reporting work-related expenses. Detailed records and receipts are now mandatory for claiming deductions.

Audit Focus

The ATO has escalated its audit activities, focusing on areas prone to non-compliance:

Shadow Economy

The ATO continues its crackdown on the shadow economy, targeting unreported cash transactions and income. This program has been extended for another three years, emphasizing the importance of accurate income reporting.

Division 7A

Increased scrutiny on loans and payments to shareholders or their associates from private companies. Taxpayers need to ensure compliance with Division 7A to avoid penalties.

Superannuation Changes

Superannuation Guarantee

The superannuation guarantee rate has increased to 11%, impacting both employers and employees. This change affects the amount of superannuation that must be contributed by employers on behalf of their employees.

Downsizer Contributions

The eligibility age for making downsizer contributions into superannuation has been reduced to 55 years. This allows more individuals to contribute proceeds from the sale of their home to their superannuation fund.

Conclusion

The 2024 income year introduces several changes that individual taxpayers need to consider when preparing their tax returns. Staying informed about these updates will help ensure compliance and maximise potential tax benefits. Taxpayers are encouraged to consult with Gotax to navigate these changes effectively.