Low and middle income tax offset changes now law – But will you get the $$
You will be entitled to some of the low and middle income tax offset if your individual taxable income is less than $126,000.
Low and Middle Income Tax Offset (LMITO) income thresholds
These LMITO thresholds apply for the 2018/2019, 2019/2020, 2020/2021 and 2021/2022 years.
|$37,000 or less||$255|
|$37,001 to $48,000||$255 plus 7.5% of the portion of your taxable income that exceeds $37,000|
|$48,001 to $90,000||$1,080|
|$90,001 to $126,000||$1,080 less 3% of the portion of our taxable income that exceeds $90,000|
- The maximum offset is $1,080 per annum
- The amount you receive depends on your income and how much tax you’ve paid throughout the year. It doesn’t mean that you will automatically get an extra $1,080 in your tax return.
This offset is separate from the Small business income tax offset which can reduce the tax you pay by up to $1,000.
You don’t need to do anything different to claim these offsets – just lodge your individual tax return and the ATO will automatically process any offsets you are entitled to.
An offset is not an automatic refund
It’s important to remember that an offset is not a refund. The offset reduces the amount of tax you pay on your taxable income. Depending on how much tax you paid throughout the year, the offset may result in a larger refund or smaller debt.
If all this sounds too confusing, feel free to give us a call on 07 5444 1022 to make an appointment with one of our friendly and knowledgeable accountants.