The standard deduction will rise to $1,000 from 1 July 2013 and will give taxpayers the option of bypassing the costly and complex work of figuring out what is deductible, correctly quantifying work-related expenses and dividing expenses between income-earning purposes and private purposes. Providing a standard deduction will remove this burden for many taxpayers and increase their tax return. No taxpayers will be disadvantaged. Taxpayers with expenses above the standard deduction will be able to continue to claim those expenses when lodging their tax return under the existing rules.
Choosing the standard deduction is expected to be a better choice for approximately 4.6 million taxpayers in 2012‑13, both financially and in terms of simplicity. In 2013-14 an estimated 6.4 million taxpayers are expected to be better off from choosing the standard deduction. Of those that benefit, around 66 per cent would have a taxable income of less than $50,000 in 2012‑13 and around 60 per cent would have a taxable income of less than $50,000 in 2013-14.
To ensure your tax return complies with all the continually changing tax legislation, Pattens recommend you enage the services of a qualified tax agent or accountant. For more information contact Pattens on 1800 PATTENS
The Government values consultation and invites interested parties to view the discussion paper and provide comments. Copies of the discussion paper can be obtained from the Treasury website (www.treasury.gov.au). The closing date for submissions is 8 April 2011.
