Good news to come out of the ATO! The government has now passed legislation to increase the new “Low and Middle Income Tax Offset” (LMITO) tax rebate to a maximum of $1,080 (for some taxpayers), for the year ended 30 June 2019.
The result of this new offset varies depending on an individual’s circumstance and taxable income:
- If your taxable income is less than $37,000, a taxpayer should be eligible for up to $255 in non-refundable tax offset.
- If taxable income is between $37,000 and $48,000, the rebate is $255 plus an extra 7.5 cents for every dollar over $37,000.
- If taxable income falls between $48,000 and $90,000, a taxpayer should be entitled to receive the full LMITO of $1,080.
- If taxable income falls above $90,000, but below $126,000, the rebate is $1,080 reduced by 3 cents for every dollar over $90,000.
Please note that all levels of the LMITO are non-refundable, which means you will not receive a refund for this amount over and above the amount you have paid in tax (i.e this offset works very differently to refundable offsets such as franking credits).
If your tax return has already been lodged, do not worry, there is no need to amend it; the ATO will automatically recalculate the change and deposit any extra refund that you’re entitled to into the bank account you originally supplied to them.
We look forward to the positive outcome of this offset for our clients! If you would like to find out more about how you can maximise the benefit of this new offset, the team at Crest Accounting look forward to completing your tax return. Please contact the team on (02) 4933 3466 or firstname.lastname@example.org, to arrange an appointment or to provide your tax information for us to compile without taking time out of your busy life!