Get Ready for Tax Time: Your WFH Questions Answered!

Tax time is just around the corner, and with it, important changes that could impact your financial future! Important Update: Division 296 – Superannuation Changes on the Horizon! As your trusted accountants, we're here to get you on the front foot, so let's dive into some superannuation news that's making waves. Proposed Division 296 Tax: What You Need to Know The Australian Government is proposing a new tax, called Division 296 (DIV296) , which is set to kick off on 1 July 2025 . This proposed tax looks to introduce an extra 15% tax on superannuation earnings that are attributed to super balances above a $3 million threshold. Key Takeaways: · Legislation Pending: This new tax has not yet been formally legislated, so it's a proposed change. · Proposed Start Date: 1 July 2025 (expected to be deferred) · Payment timing: If legislated, the first payments for Division 296 tax would not be due until after the end of the 2025–26 financial year. · Target: Individuals whose total super balances (TSB) exceed $3 million at the end of the financial year. · Tax Rate: An additional 15% on "earnings" above the threshold (on top of the current 15% fund tax rate). · "Earnings" Definition: Includes unrealised (paper) gains on your assets. It's not simply the profits you've actually made or locked in. Instead, it’s based on how much your super balance has increased over the year. · Non-Indexed Threshold: The $3 million limit won't increase with inflation. What Should You Do? While it is premature to make drastic changes before the legislation is passed, such as withdrawing money from super to avoid tax, give us a call or shoot us an email if you would like to better understand the implications of this potential change and how it may impact you.