The Low and Middle Income Tax Offset has been extended for another 12 months, meaning that taxpayers whose wage earnings situate them within a certain income bracket will again be able to receive a little extra cash back into their pockets again this year.
Tax offsets are also known as rebates and directly reduce the amount of tax payable on your taxable income. Sometimes, this can lead to the payable amount lowering to zero, but these rebates cannot be used on their own to get a refund.
You are only able to receive this amount after you have filed your tax return at the end of the financial year and in a lump sum amount that is in accordance with which wage bracket you are in and the amount you will receive.
You don’t need to complete anything in your tax return for your low or low and middle-income tax offset to be worked out for you. Instead, the amount of tax offset you will receive is worked out for you once your tax return is lodged.
If you earn under $37,000 this financial year, you will receive an offset of $225. For those who earn between $37,001 and $48,000, you will receive $255, with an additional 7.5 cents to every dollar above $37,000 up to a max of $1,080.
Those who earn between $48,000 and $90,000 a year are set to get the best deal, with up to $1,080 on the cards.
If you have any tax-related questions that the Federal Budget announcements have brought to your attention, speak with us for assistance.