Don't Lodge Your Tax Return Too Soon!
The Australian Taxation Office has been flooded with 90,000 calls as tax cuts pass, according to ABC news. The Federal Government's tax plan includes changes to the Low and Middle Income Tax Offset (LMITO), reducing the amount of tax low and middle income earners need to pay. The Federal Government estimates that 4.5 million Australian taxpayers will be eligible for the full LMITO, and a further 5.6 million will receive a partial offset.
This will encourage taxpayers to lodge their returns as soon as possible and while the ATO has said it would aim to process online tax returns within two weeks, has previously warned Australians not to lodge too early.
Assistant Commissioner Karen Foat has asked taxpayers to wait until around August to lodge. "Most employers have until July 31 to finalise their employees' income statements so, we strongly encourage taxpayers to wait a few weeks before lodging their tax return," she said. "If you lodge your tax return before your income statement is tax ready, your employer might make changes, and you may need to lodge an amendment. In some cases, additional tax and interest may be payable." Waiting also allows more time for other information, such as from banks , health funds and government agencies to be reported to the ATO.
The Government has increased the base and maximum amount of the LMITO to $255 (from $200) and $1,080 (from $530):
- Less than $37,000 get $255
- Between $37,001 and $48,000 get $255, plus 7.5 cents per dollar above $37,000
- Between $48,001 and $90,000 get $1,080
- Greater than $90,000, the offset decreases at a rate of 3 cents per dollar, ceasing at income of $126,000
Warning - if you owe the ATO money and are entitled to the new $1,080 offset, that entitlement will firstly be applied against your existing ATO debt before you receive the rest.
Read the ATO statement regarding the changes here ATO Statement on the Low and Middle Income Tax Offset