According to
the Turnbull Government Budget 2018-19 papers,
eligibility for the Low and Middle
Income Tax Offset (aka
personal income tax cut) will
assist over 10 million Australians, with about 4.4 million taxpayers with
incomes between $48,000 and $90,000 receiving the full $530 benefit for 2018–19.
The non-refundable offset is
calculated on “taxable
income” which is “equal to an
individual’s assessable income (such as salary and wages and interest from bank
accounts) minus their allowable deductions”.
The announced ‘tax cut’ has a life of four financial years and technically ceases after 2021-22.
It will not see actual tax rates change and will not see the dollar amount in wages paid on a weekly, fortnightly or monthly basis alter.
It will not see actual tax rates change and will not see the dollar amount in wages paid on a weekly, fortnightly or monthly basis alter.
The 'tax cut' will be applied by the Australian Taxation Office and form part of any tax refund due after tax returns are lodged in 2019.
The bottom line is that any person with a taxable income of less than $20,548 will not receive the announced personal tax cut according to the Budget 2018-19 website income tax calculator.
The bottom line is that any person with a taxable income of less than $20,548 will not receive the announced personal tax cut according to the Budget 2018-19 website income tax calculator.
Those with a taxable income of est. $20,548 on 30 June 2019 will receive exactly one dollar a year as a ‘tax cut’ for the next four years.
One would have a taxable income of est. $21,600 to get a ‘tax cut’ of $200 a year for the next four years.
However the first $18,200 of any individual’s personal income is currently exempt from taxation.
Hopefully for the purposes of calculating any tax refund the budget measure includes in "taxable income" the first $18,200 on which no tax is payable.
Otherwise this
budget measure means that anyone with an annual wage of $38,747 ($18,200 tax
exempt + $20,547 taxable income) will not receive the announced ‘tax cut’ for
low and middle income earners.
There is
nothing found in Budget
Measures Budget Paper No. 2 2018-19 or on the Budget 2018-19 website which clarifies the situation.
No comments:
Post a Comment