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Recent Changes in Australian Tax Law: What You Need to Know for 2024

2024 has brought several significant changes to Australian tax law, impacting both individuals and
businesses. Understanding these changes is crucial for ensuring compliance and optimizing tax
outcomes. In this blog, we’ll explore some of the key updates you need to be aware of this year.

1. Changes to Individual Income Tax Rates

One of the most notable changes is the modification of individual income tax rates. The new rates introduced in the 2024 financial year are designed to provide tax relief, particularly for middle-income earners. The following table outlines the updated tax brackets:

Income Range ($)	Tax Rate (%)
0 – 18,200	0
18,201 – 45,000	19
45,001 – 120,000	30
120,001 – 180,000	37
180,001 and above	45

These changes are part of the government’s broader tax reform agenda, aimed at simplifying the tax system and reducing the burden on taxpayers.

2. New Deduction Rules for Work-Related Expenses

The Australian Taxation Office (ATO) has introduced stricter guidelines for claiming work-related expenses. The key changes include:

• Clarity on Home Office Deductions: With the rise of remote work, the ATO has provided more detailed guidance on what can be claimed for home office expenses. This includes a fixed rate per hour for utilities, phone, internet, and other running costs.
• Vehicle Deductions: The ATO has also tightened the rules around claiming vehicle expenses, especially for individuals who use their car for work-related purposes. Logbook records must be meticulously maintained to justify claims.

It’s important to review these new guidelines and adjust your record-keeping practices accordingly.

3. Superannuation Guarantee Increase

From July 1, 2024, the Superannuation Guarantee (SG) rate has increased to 11%. This mandatory contribution by employers to their employees’ superannuation funds is part of the government’s plan to improve retirement outcomes for Australians.

Employers must ensure they are meeting these new requirements to avoid penalties. Employees should also check their payslips to ensure they are receiving the correct superannuation contributions.

4. Expanded Access to the Low and Middle-Income Tax Offset (LMITO)

The government has extended the Low and Middle-Income Tax Offset (LMITO) for the 2024 financial year, providing additional relief to eligible taxpayers. The offset amount varies depending on your taxable income:

• Up to $37,000: $255
• $37,001 – $48,000: $255 + 7.5 cents for every dollar above $37,000, up to a maximum of $1,080
• $48,001 – $90,000: $1,080
• $90,001 – $126,000: $1,080 – 3 cents for every dollar above $90,000

This extension is expected to benefit millions of Australians, particularly those on lower incomes.

5. Updates to Capital Gains Tax (CGT) for Property Investors

Property investors should be aware of changes to Capital Gains Tax (CGT) rules, particularly around the main residence exemption. From 2024, foreign residents are no longer eligible for the main residence exemption when selling their Australian property. This change could result in significant CGT liabilities for affected individuals.

Additionally, there are new reporting requirements for property investors to ensure compliance with CGT obligations. It’s advisable to consult with a tax professional to navigate these complexities.

Conclusion

Staying informed about the latest changes in tax law is essential for effective tax planning and compliance. The updates for 2024 reflect the government’s ongoing efforts to streamline the tax system and enhance retirement savings for Australians. Whether you’re an individual taxpayer or a business owner, understanding these changes will help you make informed decisions and avoid potential pitfalls.

If you need assistance with understanding how these changes impact your specific situation, don’t hesitate to contact our team of tax professionals. We’re here to help you navigate the complexities of the tax system and ensure you remain compliant while optimizing your tax outcomes.