[Australia] Warning that tax returns could be smaller than last year

Australia’s taxpayers will find themselves hundreds, even thousands, of dollars worse off compared to last year as an offset that helped bulk up returns comes to an end, Mail Online reports.

During May’s Budget, Federal Treasurer Jim Chalmers announced the end of the $11 billion low and middle-income tax offset (LMITO) previously introduced by the Morrison government.

The Albanese government's decision to end this measure will reportedly cost individuals earning under $126,000 up to $1,500 for the year. For someone earning $50,000 this amounts to a cut of $29 a week.

Coalition figures have crirticised the measure, which was brought in for the 2019-20 financial year and subsequently extended twice to help the economy remain buoyant through pandemic measures. 

“This is another hit that households are gonna feel come July 1,” Nationals leader David Littleproud said, in April. 

At that time, Dr Chalmers stated that neither party had agreed to extend the measure another year before the previous federal election. 

“Both before the election and after the election, we made it clear we couldn't afford to extend the low- and middle-income tax offset,” he said.

“(Shadow Treasurer) Angus Taylor was in the cabinet that decided that this payment would end last year. It is characteristically dishonest of him to pretend otherwise.”

The tax rise will come as bad news for many households struggling to remain afloat amidst the soaring cost of living and 12 interest rate rises on mortgage repayments over the past 13 months.  

There has been better news for Australians who work from home and claim relevant tax deductions using the fixed rate method.

This fixed rate was previously set at 52 cents for every hour worked from home. For the 2022-23 financial year, the rate has been increased to 67 cents.

For someone working 40 hours per week for 48 weeks, that represents an increased deduction of $288.

The fixed rate covers phone and internet fees, power expenses plus stationary and computer consumable costs. Other items such as furniture depreciation or cleaning will have to claimed separately.

Another change will benefit those studying or training for work purposes, allowing them to keep up to an extra $250. That was previously the threshold that the taxpayer had to pay out their own pocket before claiming the rest of the money spent as a deduction but it has reportedly been abolished and now the whole cost can be claimed. 

Source: Mail Online

(Quotes via original reporting)

Australia’s taxpayers will find themselves hundreds, even thousands, of dollars worse off compared to last year as an offset that helped bulk up returns comes to an end, Mail Online reports.

During May’s Budget, Federal Treasurer Jim Chalmers announced the end of the $11 billion low and middle-income tax offset (LMITO) previously introduced by the Morrison government.

The Albanese government's decision to end this measure will reportedly cost individuals earning under $126,000 up to $1,500 for the year. For someone earning $50,000 this amounts to a cut of $29 a week.

Coalition figures have crirticised the measure, which was brought in for the 2019-20 financial year and subsequently extended twice to help the economy remain buoyant through pandemic measures. 

“This is another hit that households are gonna feel come July 1,” Nationals leader David Littleproud said, in April. 

At that time, Dr Chalmers stated that neither party had agreed to extend the measure another year before the previous federal election. 

“Both before the election and after the election, we made it clear we couldn't afford to extend the low- and middle-income tax offset,” he said.

“(Shadow Treasurer) Angus Taylor was in the cabinet that decided that this payment would end last year. It is characteristically dishonest of him to pretend otherwise.”

The tax rise will come as bad news for many households struggling to remain afloat amidst the soaring cost of living and 12 interest rate rises on mortgage repayments over the past 13 months.  

There has been better news for Australians who work from home and claim relevant tax deductions using the fixed rate method.

This fixed rate was previously set at 52 cents for every hour worked from home. For the 2022-23 financial year, the rate has been increased to 67 cents.

For someone working 40 hours per week for 48 weeks, that represents an increased deduction of $288.

The fixed rate covers phone and internet fees, power expenses plus stationary and computer consumable costs. Other items such as furniture depreciation or cleaning will have to claimed separately.

Another change will benefit those studying or training for work purposes, allowing them to keep up to an extra $250. That was previously the threshold that the taxpayer had to pay out their own pocket before claiming the rest of the money spent as a deduction but it has reportedly been abolished and now the whole cost can be claimed. 

Source: Mail Online

(Quotes via original reporting)