The Low and Middle Income Tax Offset (LMITO) has been approved for another year!
This means that this year eligible taxpayers will be able to lower the amount of tax paid by up to $1500. The offset is available to those earning up to $126,000 per annum based on a tiered structure.
Individuals earning over $126,000 per annum will not benefit.
In other good news, LMITO was extended to apply to the 2022/23 financial year.
|$37,000 or less||$675|
|From $37,001 to $48,000||$675 plus 7.5 cents for every dollar above $37,000, up to a maximum of $1,500|
|From $48,001 to $90,000||$1,500|
|From $90,001 to $126,000*||$1,500 minus 3 cents for every dollar of the amount above $90,000|
Note: If your taxable income is $126,000 or more, you will not receive the LMITO.
Example: taxable income between $48,000 and $90,000
Mary’s taxable income is $75,000 for the 2022 tax income year. As Mary’s income is between $48,000 and $90,000, she is eligible for a low and middle income tax offset of $1,500.
Mary will receive an additional $1,500 tax refund this year thanks to LMITO!
What is Taxable Income?
When it comes to this offset, taxable income is as simple as:
Earnings (Income) – Tax Deductions = Taxable Income
Your taxable income is effectively the income left over that you will pay tax on at your marginal tax rate.
What is a tax offset?
A tax offset such as LMITO lowers the amount of tax you pay on your taxable income.
The LMITO can only reduce the tax you pay to $0. Any offset amount that remains once your tax payable is zero isn’t refunded to you, unfortunately it’s lost.
I Have Already Submitted My Income Tax
No stress. If you have already lodged your tax return, just grab a coffee and relax – we will have already applied the tax offset on your lodgement for you. The ATO will already have received this and will hopefully be processing it right now!
The direct link One Click Life has with the ATO allows us to boast that we are the fastest way to lodge your tax return. Easy Tax Returns and Fast Tax Returns!
With This New Tax Offset In Place, What Do You Need To Do?
The answer is nothing. If you are lodging with One Click Life, it will automatically calculate your tax refund including the new tax cut. We partner with the ATO to help you save time in lodging as we pre-fill as much data as possible, so you won’t even need your PAYG statement!
If you want to lodge your tax return online click here or you can call us at 1300 707 117.
LOG IN and claim your refund on your 2022 Tax Return today!