The 2% ‘debt tax’ is ending on 30 June 2017!
Basically you are better off earning more taxable income over the $180,000 level next year.
All things equal:
Tax on $350,000 of taxable income for the year ending 30 June 2017 is $3,400 more than 30 June 2018; $6,939 in income is needed to pay that $3,400 extra tax.
Taxpayers with assessable income above $180,000 face an additional 2% tax on every dollar above this level till 30 June 2017 as the debt or Budget Repair levy on income over $180,000 is removed at 30 June 2017.
Therefore reducing your taxable income through salary packaging and other planning initiatives is worth considering this year especially.
If you are likely to have a one off spike in income, for example from the sale of a business or other significant assets, it’s worth seeing if you can delay the sale until 1 July 2017 to avoid paying an additional 2% tax. Just be aware of how the arrangement is structured. In many cases the sale is treated as having taken place for tax purposes when the parties enter into the contract, even if settlement occurs at a later point in time.
If you are an investor consider prepaying 12 months of investment interest or paying for education courses prior to June 30. Managing this situation may be easier than you think and with some careful planning save you money.