Happy new year!
I hope you have had a great break and are ready to make 2022 a great year for you and your family. Sadly we start the year with an astronomical number of Covid 19 cases, hopefully we can still make it through this year without too many lockdowns or other Covid related impacts.
At Mount Martha Accountants we are hear to help and can meet you either in person or virtually, while Covid cases are high we will be wearing face masks at all meetings and ask our clients to do the same. We also clean all common surfaces between each client so you can feel safe vising us, of course all our team are also fully Vaccinated.
Key 2022 Tax Changes and Rules
LIMTO; Extending the low and middle income tax offset (LMITO) The government announced in the 2021–22 federal Budget that the low and middle income tax offset will continue to be available for the 2021–22 income year, this change is not yet law though.
Loss Carry-Back; the government announced targeted support to businesses and encouraging new investment through a loss carry back regime. Eligible corporate tax entities that previously had a liability to pay corporate income taxes in a relevant year and have subsequently made a tax loss can claim a refundable tax offset. Eligible corporate tax entities with less than $5 billion aggregated turnover in a relevant loss year (or the income year before that year) can carry back a tax loss made in 2019–20, 2020–21 or 2021–22 to a prior income year’s income tax liability in 2018–19, 2019–20 or 2020–21.
Instant Asset Write Off; Businesses with an aggregated turnover of less than $5 billion can immediately deduct the business portion of the cost of eligible new depreciating assets. Corporate tax entities unable to meet the $5 billion turnover test may be eligible for temporary full expensing under the alternative income test. The eligible new assets must be first held, and first used or installed ready for use for a taxable purpose, between 7:30pm AEDT on 6 October 2020 and 30 June 2021. This date is extended to 30 June 2022 pending royal assent.
For businesses with an aggregated turnover of less than $50 million, temporary full expensing also applies to the business portion of eligible second-hand depreciating assets. Businesses can also immediately deduct the business portion of the cost of improvements to eligible depreciating assets (and to assets acquired before 7.30pm AEDT on 6 October 2020 that would otherwise be eligible assets) if those costs are incurred between 7.30pm AEDT on 6 October 2020 and 30 June 2022.
It is likely we will see more new tax laws proposed as we are in an election year this year, we will keep you updated.