As you may or may not be aware, in October 2020 the Government brought forward the tax cuts that had originally been scheduled for July 2022 to 1st July 2020.
Whilst this is great news! This means that you were paying tax from 1st July 2020, to when the government made the changes, at the higher rate of tax. (of course, assuming that your job and income has remained the same since then)
What has changed?
The tax brackets have changed so that the upper threshold of the 19% tax bracket has increased from $37,000 to $45,000 and the upper threshold of the 32.5% tax bracket has increased from $90,000 to $120,000.
The Government has also extended the Low to middle income tax offset (LMITO) to this year as well, which is an additional benefit to anyone earning up to $126,000
The Low income tax offset (LTO) has also increased to $700 this year (from $445)
What is an offset and How do you claim it?
A tax offset means that you pay less tax on your taxable income. Tax offsets are deducted from the tax that is payable so reduces your tax. It can't however be refunded to you and is only used to reduce your tax payable to zero.
Provided your return is completed correctly, LMITO and LTO are automatically applied in your return.
For more information, or if you need a little help,
please contact us 0409 715 577
This articles intention is to inform rather than advise and is based on legislation at the time. Each Taxpayer’s circumstances vary so we strongly recommend that you discuss this information with your Tax Agent, Accountant or Bas Agent before implementation. If you take, or do not take action as a result of reading this article, we accept no responsibility for any financial loss incurred.
Comments