Looking for some financial relief this tax season?The Low and Middle Income Tax Offset (LMITO) may apply to you
This year has just flown, here at the MMA office we can’t believe that June 30 has already been-and-gone. This year has been challenging for all of us in one way or another, and it’s likely your pocket has felt the impact. We understand you’re probably hoping for a bit of relief at tax time and wondering what concessions may be available for you.
Luckily, those who earn under $126,000 will continue to receive the Low and Middle Income Tax Offset (LMITO) this year, along with a one-off $420 ‘cost of living’ tax offset, increasing the maximum offset from $1,080 to $1,500.
How does a tax offset work? Will I get a tax refund in 2022?
A tax offset (also known as a tax rebate) works by reducing the amount of tax you owe at the end of a financial year. The tax offset amount you receive depends on two factors:
- Your taxable income
- The amount of tax you need to pay on this income (your tax payable)
It’s important to be aware that a tax offset can only reduce your tax payable to nil, any excess offset is not refundable. This means you don’t receive the amount of the offset entitlement directly as a lump sum. Similarly, if you didn’t pay any tax during the 2022 tax year, you won’t receive the LMITO as a refund.
The ATO have also stressed that tax offsets can’t be used to reduce other payments you need to make, such as the Medicare Levy or Medicare Levy Surcharge.
How much money will I get as a rebate through the low and middle income tax offset?
It depends on your income for the 2022 financial year, as follows:
How do I claim the Low Middle Income Tax Offset
If you’re eligible for the LMITO, you don’t need to do anything. If you choose to lodge your tax return through MMA, we will estimate your LMITO prior to you lodging your return with the Australian Taxation Office (ATO). The offset you are entitled to is then calculated by the ATO once your 2022 tax return is lodged.
How can I maximise my 2022 tax return?
At MMA, we specialise in helping individuals and families across Tweed Heads, Northern NSW and beyond to maximise their tax returns. This year, we are excited to introduce our new Online Tax Shop, where you can jump on our website and complete your tax return with minimal downtime and effort.
We know it’s been a tough year for most Australians, so we’re committed to making tax time as stress-free as possible for you, while providing you with the peace of mind in knowing you are maximising your return.
Do you want to be one of the first to sign-up for our online tax shop? Drop your details below and we’ll contact you as soon as bookings open.