Tax breaks for savers

In 2010 the Federal Budget announced that from July 1, 2011 new tax breaks for savers would be introduced. But it was never rolled out and in 2012 the government did a backflip, much to the ire of the banks, and withdrew the tax break which was said to be worth $923.5 million.

The tax break would have seen savers receive a 50 percent tax breaks on the first $1,000 of interest earned from various deposit accounts. But for now, it will remain as it currently stands, with those with various types of savings accounts and investment accounts paying tax on the total interest earned each year.

The amount of tax you pay depends on the current Australian tax brackets and your annual income. Visit the Australian Taxation Office website and view the individual income tax rates to work out how much your savings will be taxed.

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