I paid attention during the recent federal election campaign, I swear. But somehow, in between the chaotic and confusing messages about negative gearing and childcare and first homebuyers and climate change, I missed the part where Scott Morrison promised us all a bunch of tax cuts.
What rock have I been living under?!
Now that the election behind us, the government has confirmed it will be following through with their promised tax cuts.
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These amount to up to $1,080 for over 10 million Australians – and they’ll be available in about six weeks, once we lodge our 2019 tax returns!
“A little speed hump is that only the original offset of $530 will be ready to go by 30th June,” says accountant Sam Robinson.
“But never fear – the ATO have said that as soon as the second part of the offset, which is worth up to $550, is passed through parliament, amended assessments will be issued automatically and refunds given to eligible Australians that have lodged their tax returns.”
For those, like me, who may have missed the news about this tidy financial windfall, this is what it’s all about in a nutshell.
Over the next five years, the Coalition’s long-term tax plan will see tax rates change in three phases: now, in 2022, and in 2024.
By 2024 the 37 per cent tax bracket will be removed entirely, so that all taxpayers earning between $45,000 and $200,000 will pay a flat 30 per cent tax rate. Those earning over $200,000 will pay 45% of any earnings above this amount.
From this July, when you lodge your tax return, you are eligible for the following tax refund:
• Those earning below $37,000 will receive up to $255.
• Those earning between $37,001 and $47,999 will receive between $255 and $1080.
• Those earning between $48,000 and $90,000 receive the full $1080 tax cut.
• Those earning $90,001 to $126,000 receive a portion of the above tax cuts.
• Those earning more than $126,000 receive no further tax breaks.
I suspect the ATO’s online tax lodgement platform is going to get smashed with activity from July 1. After all, if this isn’t an added incentive to get your 2019 tax return lodged as early as possible, then I don’t know what is!