Australian taxpayers will be able to claim a $500 standard income tax deduction, without receipts, instead of going to the hassle of using receipts to claim work-related expenses and the cost of managing their tax affairs.
Assistant Treasurer Bill Shorten today released a discussion paper outlining the proposed standard deduction for individual taxpayers, which was announced in the 2010-11 Budget.
“A standard deduction removes the hassle of a shoebox full of receipts for Australian taxpayers. It simplifies income tax returns for individuals and the Australian Taxation Office,” Mr Shorten said.
From 1 July 2012, the $500 deduction, which will rise to $1,000 from 1 July 2013.
“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.”
The government thinks that the standard deduction is expected to be a chosen by approximately 4.6 million taxpayers in 2012?13, and by 6.4 million taxpayers in 2013-14.
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.
“A standard deduction makes it easier for working families to get the best possible tax return and continues the Gillard Government’s ongoing efforts to simplify the tax system. I encourage interested taxpayers and others to make submissions to the discussion paper,” Mr Shorten said.
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.
The original $300 exemption from needing receipts was introduced way back when Paul Keating was treasurer and $300 was a high level of deductions. These days most union members pay close to $500 in that one expense alone.