The media has done a great beat up job of sensationalising the effect of the recently announced tax cuts and we have been receiving questions daily about the so called 'tax bonus'.
We thought we'd clear up a few of the furphies we've heard.
This is not a tax 'bonus' - it is a tax offset, specifically a low and middle income earner tax offset.
It is a non-refundable offset, which means that it can only reduce the amount of tax you pay to zero. If your tax offsets are greater than the amount of tax you have to pay, you don't get a refund of the excess amount.
You might be eligible for the full offset AND still end up owing Mr Tax Man money, depending on your circumstances.
The government is not sending you a cheque for $1,080, you need to lodge your 2019 tax return and be assessed.
The low income tax offset has been around for a while, the low and middle income tax offset is new and in effect from 2018-19 income tax years until 2021-22. It is in addition to the low income tax offset.
If your taxable income is between $37,000 and $126,000 you will receive some or all of the low and middle income tax offset.
The amount of the offset you are entitled to will depend on your individual circumstances, as mentioned above you need to prepare and lodge your 2019 tax return and be assessed.
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