Tax Laws Amendment (2010 Measures No. 1) Act 2010 was recently passed by Parliament and has received royal assent. The new laws apply from 1 July 2009.
The government will apply an income test to the eligibility criteria for the entrepreneurs’ tax offset (ETO) to more appropriately target the offset towards genuine small, micro and home-based businesses.
The income test restricts access to the ETO for businesses with high alternative sources of household income (that is, income not referable to the relevant small business).
The ETO currently provides a 25% income tax liability tax offset for small businesses with an annual turnover of $75,000 or less, phasing out from a turnover of $50,000.
Under the new income test, the ETO amount will be reduced where the income test amount exceeds the following thresholds:
- $70,000 for singles
- $120,000 for families.
Warren Kruger is an Australian Tax Specialist and Advisor. For a FREE Report “7 Essential Strategies to Reduce Your Taxation NOW!”,enter your name and email address in the Opt In Box located on the top right hand side of this article.
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