Tax Changes from 1 July 2024

What do the changes mean for you and what can you do with the tax savings?

As the new financial year approaches, Australians are gearing up for the latest round of tax changes set to take effect from 1 July 2024. These changes, now enshrined in law, are poised to alter the financial landscape for taxpayers across various income brackets. All taxpayers earning over $18,200 are set to get a tax cut. 

The Treasury has a calculator available to determine the amount of tax cut individuals will receive based on their annual taxable income, you can find it here. Some examples are below:

Estimated Tax Cuts:

So, you are set to get a tax cut? What are you going to do with it?

There are several options to consider:

Invest in Superannuation

Boost your retirement savings by contributing to your superannuation fund. This not only helps secure your future but may also provide additional tax savings. 

Pay Down Debt

Use the extra funds to pay off high-interest debts such as credit cards or personal loans, which can save you money on interest payments in the long run.

Create an Emergency Fund

If you don’t already have one, consider starting an emergency fund. This can provide financial security and peace of mind for unexpected expenses.

Additional Home Loan Repayments

Consider making extra payments on your home loan. This is likely to reduce the total interest paid over the life of the loan. 

Salary Sacrificing

Explore salary sacrificing options with your employer, which can include benefits like cars, computers, or additional superannuation contributions. 

Invest

Consider investments outside of superannuation, to meet your short-term and long-term needs. 

Spend It

With the increasing pressure on household spending, use the extra income to splurge on something for you and your family. This could be a family holiday or improvements around the home. 

Keep an eye out for our upcoming articles, where we delve into some of these options further.

If you would like to discuss how these changes apply to you and which option may be best for you, feel free to get in touch with us.