Personal income tax cuts

Personal income tax cuts

As widely predicted, the Government has brought forward stage 2 of its planned income tax cuts by two years. Originally intended to apply from 1 July 2022, the tax cuts will come into effect from 1 July 2020 (subject to the passage of the legislation). The Treasurer the Hon Josh Frydenberg anticipates more than 11 million taxpayers will get a tax cut backdated to 1 July this year.

At a cost of $17.8 billion over the forward estimates, bringing forward the tax cuts is a controversial move. The Government argues that the measure will “boost GDP by around $3.5 billion in 2020-21 and $9 billion in 2021-22 and will create an additional 50,000 jobs by the end of 2021-22.” Others in Parliament believe the measure rewards higher income earners and the money could be better spent elsewhere. The Senate will decide whether the Government’s plan comes to fruition.

Stage 3 of the Personal Income Tax Plan that simplifies and flattens the personal income system remains scheduled for 2024-25.

  Tax thresholds
Tax rate Current From 1 July 2020 From 1 July 2024
0% $0 – $18,200 $0 – $18,200 $0 – $18,200
19% $18,201 – $37,000 $18,201 $45,000 $18,201 – $45,000
30%   $45,001 – $200,000
32.5% $37,001 – $90,000 $45,001$120,000
37% $90,001 – $180,000 $120,001 – $180,000
45% >$180,000 >$180,000 >$200,000
LITO Up to $445 Up to $700 Up to $700

Bringing forward the personal income tax plan will:

  • Increase the top threshold of the 19% tax bracket to $45,000 (from $37,000)
  • Increase the top threshold of the 32.5% tax bracket to $120,000 (from $90,000)
  • Increase the low income tax offset from $445 to $700

In addition, the LMITO (low and middle income tax offset), which provides a reduction in tax of up to $1,080 for individuals with a taxable income of up to $126,000, will be retained for 2020-21. This measure was to be removed at the commencement of stage 2 of the reforms from 2022-23.

If you need any assistance please contact your PrimeAccountant on 02 9415 1511 or email reception@primeadvisory.com.au.

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SCAM WARNING – Do not reply, delete immediately

SCAM WARNING – Do not reply, delete immediately

During a time such as COVID-19 many scammers see an opportunity to target people who may already be afraid or unsure. Here are a few examples that will give you a better understanding of the types of scams and how scammers are targeting people through both email and SMS.

Several emails are circulating with malicious attachments claiming that the recipient is eligible for a ‘working from home payment’, these are scam emails trying to get you to download malicious software. Other emails are asking for your personal information such as drivers licence and Medicare card. Many of these either try and impersonate the Government or a third party. Note you should never give personal information unless you are sure who you are dealing with.

There has been reports of different SMS scams circulating in Australia that are pretending to be from the Government and trying to get you to click malicious links and give out your personal and financial details.

Scammers have also started to target Australians financially impacted by the COVID-19 crisis, cold calling people claiming to be from organisations that can help you get early access to your superannuation. These scams are following from the Government’s announcement about early access superannuation. The ATO is coordinating the early release of super through myGov, there is no need to involve a third party or pay a fee to access this scheme.

If you receive a message from the ATO asking for your personal information, you can call them on 1800 008 540 to make sure it’s legitimate. If you think it’s fraudulent, report it by email to reportemailfraud@ato.gov.au.

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Download our JobKeeper 2.0 Guide Today!

Download our JobKeeper 2.0 Guide Today!

From 28 September 2020, the eligibility tests to access JobKeeper for employers changed, along with the amount of the JobKeeper payment for employees and business participants. To receive JobKeeper from 4 January 2021, employers will need to assess their eligibility again.

Download the Guide here

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Have you reviewed your personal insurance?

Have you reviewed your personal insurance?

The insurance industry is ever-changing. The historical approach of ‘set and forget’ with respect to policies, is not appropriate. Our insurance partners MBS are committed, confident and capable of delivering better outcomes for you. Book in your FREE review as today!

Why you NEED to review existing policies;

  1. Premium Volatility – Insurer profitability according to APRA and flow on to the premiums payable.
  2. Policy Wording Changes – Recent changes to policy wording by Super. Funds & APRA impress upon the need to review.
  3. Cover Quality – With access to the market and research analysis, we examine the quality of the existing policies and advise accordingly.
  4. Price & Structure – We analyse the potential for premium saving and effective policy structure, not just for year 1, but the impact year on year.

Who benefits most from a policy review?

  1. Young Families – Marriage, acquisition of a new home or investment property and birth of a child are all common trigger points for the need for advice and appropriate cover.
  2. Executives & Business Owners – Executives & business owners accumulating wealth, paying private school fees, upgrading homes, or acquiring holiday homes will recognise the need and value the process.
  3. IP Tax Deductions – Income Protection tax deductions are one of the most common identifiers when examining which of your clients have, or should have, a policy. Those under 55 years and earning > $80,000 should certainly be provided with options to protect what is, in many cases, their largest financial asset.
  4. SMSF – Trustees have an obligation to review the need for Insurance, however they should also be provided advice on the structure, quality and appropriateness of the portfolio. Like ITR’s, Super Fund returns are an easy place to identify those with and those without cover.

For more get in touch with the team on 02 9415 1511 or email reception@primeadvisory.com.au.

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Practising gratitude makes us happier & less stressed.

Practising gratitude makes us happier & less stressed.

Gratitude combats stress? Had you said this to me back in my medical school days, I would have put my nose up at this claim. Being the concrete thinker that I was back in my twenties, I needed scientific proof for everything health related.  None of this ethnic-bongo-hairy-armpit brigade stuff, as my father used to call it. Fast track 30 years and there is now a ton of research to show precisely this. Expressing gratitude daily for the things you have, reduces our stress hormone levels. Who would have thought? By merely pausing for a few minutes a day and focusing on being thankful, showing appreciation for and returning kindness to others, can not only reduce our stress levels but is beneficial for our overall health and happiness.

Happy chemicals in the brain
Without getting too technical, research shows that focusing our attention on things we are grateful for actually forces a shift to the positive when it comes to some of our endogenous (self-made) happy chemicals. The simple act of being grateful has been shown to stimulate more neurotransmitters in the brain, specifically dopamine and serotonin, which in turn promote feelings of contentment. It goes without saying that this cascade of feel-good chemicals has a positive impact on our mental health too.

Gratitude benefits our mental health
Recent evidence suggests that complementing psychological counselling with additional activities that are not too cumbersome for clients but yield high results, may be helpful when dealing with mental health challenges. In research conducted by Joel Wong and Joshua Brown back in 2017, they zeroed in on the practice of gratitude to determine why study after study was showing that people who consciously express gratitude, are happier and felt less depressed.  Whereas most research studies on gratitude were conducted with well-functioning people, their research honed-in on people who were struggling with mental health challenges.  They found a number of reasons why gratitude may impact our bodies and minds, thereby positively affecting our mental health.

  1. Gratitude unshackles us from negative emotions.
    The act of writing down what we are grateful for produces better mental health by shifting our attention from toxic, negative emotions, such as resentment and envy, towards more positive emotions such as love and appreciation. When we write about what we are grateful for, and how other people have blessed our lives, it is considerably more difficult to get bogged down by negative experiences.
  2. Gratitude helps even if we don’t share it.
    The mere act of expressing gratitude has a positive impact on our mental health and is not dependent on actually communicating that gratitude to another person. Thinking of writing a gratitude letter to someone, however, don’t really want them to read it? You should write it anyway. The simple act of writing the letter helps us appreciate the people in our lives and shifts our focus away from negative feelings and thoughts.
  3. Gratitude benefits take time.
    Just like building a muscle, you can’t lift a dumbbell once or twice and expect to have biceps like Arnold Schwarzenegger. The same goes for gratitude. When we first start taking time out to be grateful, we may not immediately feel the positive effects. However, countless studies show that the more we complete this activity, the more we fire those neurotransmitters in our brains, and the more chemicals like serotonin and dopamine will be produced. The long-term benefits of expressing gratitude have been demonstrated and clearly positively impact our mental health.
  4. Gratitude has long-lasting effects on the brain.
    An interesting finding by Wong and Brown was that individuals who wrote gratitude letters showed increased neurological activity in the medial prefrontal cortex when they experienced gratitude as seen in the functional MRI scanner. “This finding suggests that practising gratitude may help train the brain to be more sensitive to the experience of gratitude down the line, and this could contribute to improved mental health over time,” said Wong.Strategies to bring more gratitude to our lives
    Here are some proven strategies; some of them are straightforward practices that we can try on our own; some are activities that can be done regularly to elevate our sense of well-being.  Whatever you are looking for, consider the following and see how you may flood your life with gratitude.Smile!
    Research has shown that the simple act of smiling can change the way we feel, regardless of why we are smiling. Instinctively people often smile back when they see a genuine smile on someone’s face.  This can double the benefits because not only do you feel better, but you’ve created an environment where others are smiling back at you. And let’s not forget that a smile can ease a complicated social interaction in seconds, reducing the amount of stress you might feel in an otherwise awkward or difficult situation.

    Keep a gratitude journal
    Journaling has many proven benefits, including better health and greater resilience. Keeping a gratitude journal, however, brings an extra element of benefit. Writing down three things that you are grateful for on a daily basis, will allow you to enjoy the emotional lift that gratitude brings. Keeping a gratitude journal can lift depressed feelings and also help to relieve stress.

    Practice the Loving-Kindness meditation
    This form of meditation starts with focusing on positive, loving feelings towards yourself, and then branches out from there to others. The loving-kindness meditation is widely practised and brings not only the benefit of meditation, which is a huge stress reliever but also increases compassion and connection to others. This type of meditation can help you immerse yourself in the feelings of gratitude you have for all the people in your life that are important to you, and to develop greater feelings of gratitude for those with whom you may struggle.

    Stop comparing yourself
    Envy is one of those emotions that virtually every one of us falls prey to. A friend who has got the perfect relationship or crazily well-behaved children, or someone we know gets a promotion when we feel perhaps it should’ve been ours. Those of us who are prone to envy tend to compare the worst thing in our lives to the best thing in someone else’s.  Rarely do we trade entire lives with someone else and get the whole picture. Instead, we tend to pick those pieces of our life we don’t like and compare them to those parts of other people’s lives that we don’t have and wish we had.  If you find you are wrestling with the green-eyed monster, you can alter your comparisons and add in some gratitude.  If you find yourself wishing for something that someone else has, remind yourself to notice what you have and they don’t, not in a comparative way but in a way that makes you realise how lucky you are as well.

    Give a hug and say thank you
    Merely saying thank you with a quick word or embrace can go a long way to making you feel connected to others. They also will likely feel more connected to you. These fleeting experiences can translate into positive feelings on both sides of the relationship, and build stronger relationships and all the benefits that come with these.

    Plan a gratitude visit
    Think of how many people in your life have shown you kindness at some point or other – kindness that perhaps has changed your circumstances, given you something that you really needed and was important to you, or helped you in some way during a time of need. When last did you tell one of these people how much you appreciated them and what they did for you, and how it helped you in your life?  Perhaps writing a letter of gratitude and delivering it or going on a gratitude visit can bring positive feelings to those people in your life that you appreciate, and even more feelings for you! It is a significant gesture that gets even bigger benefits. So have a think about who in your life deserves a gesture of gratitude from you. It may just be a word of thanks, a warm hug or an acknowledgement of the critical role they play or have played in your life.

    On a final note
    Cultivating gratitude is really a very simple way of creating greater emotional well-being, a higher level of overall life satisfaction and a greater sense of happiness in life. Why wouldn’t you want to feel more positive and content, have oodles of serotonin and endorphins circulating in your veins, have stronger relationships with your loved ones and a greater sense of connection with your family, friends and community? It sounds like a no brainer, so what are you going to do today to start building your gratitude muscle?

Author: Leanne Wall
E: Leanne@drleannewall.com
W: drleannewall.com

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