Low and Middle Income Tax Offset

In the 2019-20 Federal Budget, the Government announced a little sweetener to look out for when you lodge your income tax return this year.

The 2019 tax return ought to have a non refundable tax offset in the tax estimate. Look for it when your accountant prepares your return. Being non refundable, if you haven't paid any tax, there is no cash to come back, however for those who have paid tax in any way, be it franking credits on shares, PAYG witholding on business activity statements or tax withheld through salary, there ought to be a low and middle income tax offset for most taxpayers.

The schedule runs as follows:

With taxable income of $37,000 or below, you get an offset of up to $255.

With taxable income below $48,000, you get $255 pluse 7.5% on the amount above $37,000.

With taxable income below $90,000, you get $1,080

With taxable income between $90,000 and $126,000 you get $1,080 less 3% of the amount $90,000.

Schedules of this nature are common in income tax. It is like Government just can't quite get their head around being simple. It is all in the name of equity and fairness of course which ironically is in the eye of the beholder anyway so making it complicated tends to result in the public either disregarding the action or seeing some mischief which may or may not be present.

With some interest rate cuts and the odd small bonus in your income tax, every bit helps in balancing the household budget.