On budget night, Tuesday 11 May 2021, the Government announced an extension to the Low and Middle Tax Offset for another year for the 2021-22 financial year.
Here are 4 things you need to know about the government’s $1080 tax offset:
- It’s an offset, not a payment. It doesn’t mean that you will get an extra $1080 in your tax return. The offset will reduce the amount of tax you pay on your taxable income. You may receive a larger refund than you normally would, or you may have to pay less if you receive a tax bill.
- $1080 is the maximum offset amount. The majority of Australian workers will receive this offset as their taxable income exceeds $48,000 but is not more than $90,000. Your offset amount will depend on your individual circumstances, such as your income level and how much tax you paid throughout the year.
- Not everyone gets it. If you earn more than $126,000 you won’t get any tax offset at all – sorry! At the other end of the income scale, you can’t claim the offset if you haven’t received any income during the financial year.
- The ATO will automatically apply the tax offset when lodging your tax return. Besides lodging your return with us before the May 15 due date, there’s nothing else you need to do. Tax refunds will be paid into your nominated bank account within one to two weeks after lodging.
Still confused? Don’t worry, we’re here to help.
Contact us today on (08) 8172 9150 to book an appointment with one of MasterTax’s expert accountants who can confirm what tax offset you will receive.
