The federal budget was recently published on 8 May with a huge amount of detail; as doctors are often pressed for time, we have worked our way through this and found the key measures that will affect our medical clients.
New tax offset
There have been some minor changes to the amount of tax that all taxpayers will pay. The introduction of the Lower- and Middle-Income Tax Offset reduces the tax paid for all income earners who earn up to $125,333.
Change in tax bracket
The $37,001–$87,000 tax bracket has been adjusted to $37,001–$90,000. This change reduces the tax paid per year by $135 for anyone earning over $90,000.
Extension of $20,000 limit for deducting business assets
Small businesses (those with a turnover of less than $10 million of income) can continue to deduct the full value of an asset that is worth $20,000 in the year that they purchase the asset. So doctors setting up a new clinic or refitting an existing one can claim the majority of their equipment in the year they purchase it. If you are going to purchase a new car worth under $20,000 for yourself or a family member, you may be able to purchase this through your business entity (if you trade as a company or trust), and then be eligible to deduct the full value of this as a business asset.
Salary employees
In years gone past many doctors who work at multiple hospitals as salary employees and earned over $263,157 in a year contributed over their $25,000 superannuation contribution cap. This was because each employer would contribute the full 9.5% super for them. These rules have been changed so that if you are in this situation you can nominate employers not to pay you the full amount of super so that you do not exceed your contribution cap.
Self-managed super fund changes
If you manage your super through a self-managed super fund (SMSF) and have received unqualified audit reports for the last three years (the auditor has found no issues with your fund), you will no longer be required to have your SMSF audited every year, instead audits will be only required every three years.
The number of members allowed in a SMSF will now also be increased from four members to six.