It’s Tax Time.. Understanding the Personal Income Tax Plan

tax australia 2019

Refunds of up to $1080

650,000 people have already lodged their tax returns and the Australian government is working overtime to process the 2019 tax refund into people’s nominated bank accounts. The new tax offset recently passed in Australia, provides an offset of up to $1080 for middle-income earners (incomes between $48,000 and $90,000).

That relief comes in the form of the The Low and Middle Income Tax Offset or “Lamington” (a cheque worth up to $1080 a year in your tax return) which will apply to people earning up to $126,000 a year – 70 per cent of taxpayers – over the next three years, when they lodge their tax return.

Tax savings are as follows:

Taxable income Tax saving
$37,000 or less Up to $255
$37,000 – $48,000 Offset increases at a rate of 7.5c per $ to a maximum offset of $1,080
$48,000 – $90,000 $1,080
$90,000 – $126,000 Offset phases out at 3c per $1

How to get your refund

The great news is that this refund will apply to tax returns last financial year, and going forward. Want to know how much you could get back? Use this tax relief estimator from the ATO.

 

Sources: The Sydney Morning Herald, Tax cuts: How much will you get this year and beyond?; Moore Stephens, 2019-20 Federal Budget Report: Personal Taxation.