Millions of Australians will be receiving between $255 and $1080 in tax cuts for the 2018-2019 Financial Year as part of the Coalition’s income tax plan that passed parliament last week. This is phase one of tax reduction plans that will be implemented over coming years.

How much will you receive? How much you will receive will depend on your income level. We have included a link to a tax cut estimator so that you can work out the impact of the cuts on your financial position this year and for future years.

https://www.budget.gov.au/2019-20/content/estimator/incometax.htm

The tax relief for the 2018/2019 year is to be delivered from two areas:

  1. An increase in the top threshold of the 32.5% tax bracket from $87,000 to $90,000, and
  2. A new low- and middle-income tax offset that is available on a sliding scale for all Australian resident individuals whose income does not exceed $125,333.

When will you receive your tax cut?

The tax cuts will be incorporated automatically in the calculation of your tax payable/refundable by the ATO upon lodgement of your 2018-19 tax return. Any refund in your favour will be included in your tax return refund EFT to your nominated bank account.

The ATO is advising taxpayers to hold off lodging tax returns until August as employers have until July 31 to finalise their employee’s income statements/payment summaries, reducing the need for potential amendments.

Waiting a little longer will allow time for other information from banks, health funds and government agencies to be pre-filled into peoples’ tax returns but will not impact your ability to receive the tax cuts.

If you are sure of all your income and expenses, you can lodge before July 31 with no impact.

 

Angeline Bryer