What the new Federal Government tax cut means for you.

Australian taxpayers have been expecting an additional cash refund this 2019 financial year following a mistaken understanding of the $1,080 offset promised through the Coalitions proposed tax package which was passed into law early July.
This comes in the form of a no-refundable tax offset which reduces your overall tax bill so you will either get a bigger refund than normal, or you might end up having to pay less tax if you receive a bill and it is built into your refund.

This also means that any unused offset amount itself cannot be refunded or reduce the Medicare Levy. Where many Australians were instead expecting a separate automatic cash refund from the Government for this assumed $1,080, it actually depends on how much you’re earning as to what offset you are eligible for.

This applies for refunds lodged from 1 July 2019 for low and middle income earners and the offsets include*:

• Individuals with taxable income that exceeds $37,000.00 but is not more than $48,000.00 will receive $225, plus an amount equal to 7.5% to the maximum offset of $1,080
• Individuals with a taxable income that exceeds $48,000.00 but is not more than $90,000.00 will be eligible for the maximum low and middle income offset of $1,080
• Individuals with a taxable income that exceeds $90,000.00 but is not more than $126,000.00 will be eligible for a low and middle income tax offset of $1,080, less an amount equal to 3% of the excess
• Individuals earning more than $126,000.00 you will receive no offset

Here at HPartners, we have a range of resources to assist you with tax planning and advice including your Financial Adviser like myself, a qualified and registered Tax Adviser, as well as our team of accountants and tax agents. Have a chat to us today, to see what you are eligible for and how we can help you!

This article contains general information only in relation to taxation and the Governments Personal Income Tax Plan legislation.  It does not take into consideration your personal information and/or circumstances. You should consider the appropriateness of this information for your personal circumstances, before making any decisions and/or taking any action.

*(Source: https://www.ato.gov.au/General/New-legislation/Lower-taxes-for-hard-working-Australians–Building-on-the-Personal-Income-Tax-Plan/)