2024 Budget and Family Day Care
The annual federal budget was delivered yesterday evening, 14th May 2023. Once again there is limited reference to Family Day Care reforms or incentives specifically, but the long awaited tax cuts, as well as an extension to the small business depreciation rules and energy bill relief are welcomed.
Tax Cuts
The following table outlines the estimated tax savings (excluding Medicare) of the new tax cuts based upon your expected taxable income.
Taxable Income | Estimated Tax Savings |
$20,000 | $0 |
$30,000 | $354 |
$40,000 | $654 |
$50,000 | $929 |
$60,000 | $1,179 |
$70,000 | $1,429 |
$80,000 | $1,679 |
$90,000 | $1,929 |
$100,000 | $2,179 |
$120,000 | $2,679 |
Under current law small business entities are entitled to a tax deduction for the full cost of any business asset costing less than $1,000 for the 2025 income year.
The Government has announced it will temporarily increase the instant asset write-off threshold for small business to $20,000 for the 2025 income year.
This applies on a per asset basis. For assets costing more than $20,000 (which cannot be immediately deducted) can be claimed at a rate of 15% of the cost in the first year, and then 30% on the remaining value of the asset in subsequent years.
TIP: In order to claim the full cost of an asset this tax year, you must have the item of plant or equipment in your possession, installed and ready and available for use BEFORE 30 June 2024.
IMPORTANT: Before making any significant purchase you should always speak to your tax advisor to ensure the asset you are purchasing is eligible for this concession, the amount you may be entitled claim as a deduction, and to ensure you maximise the tax benefit of any such purchase.
3. Energy bill relief
The Government is providing direct energy bill relief for every Australian household. From 1 July 2024, all households will receive a total rebate of $300, which will be automatically applied to their electricity bills in quarterly instalments.
4. Superannuation on Paid Parental Leave
The Government has announced that it will pay superannuation on Commonwealth government-funded Paid Parental Leave for births and adoptions on or after 1 July 2025. Eligible parents will receive an additional payment based on the Superannuation Guarantee (12% of their Paid Parental Leave payments), as a contribution to their superannuation fund.
Who is FDC Tax?
FDC Tax specialises in Family Day Care. Should you have any questions relating to this article or the 2024 budget in general, or are looking to take advantage of the services we provide, please feel free to contact us.
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