The Low and Middle Income Tax Offset (LMITO) helps low and middle income earners lower the amount of tax they need to pay. Because it is a tax offset, it can only be used to lower the amount of tax that you owe and not to generate a tax refund or pay your Medicare Levy.
The Personal Income Tax Plan which provides targeted tax relief over seven years for low and middle income earners and protects middle income Australians from bracket creep consists of three steps.
Learn the Australian income tax rates for 2019/20 and 2020/21, as well as details on how income tax is calculated, deductions, offsets and levies.
The $700 Low Income Tax Offset (LITO), combined with the tax-free threshold of $18,200, and the Low and Middle Income Tax Offset effectively allows working Australians to earn up to $22,801 for the 2020/21 financial year before they need to pay any income tax or Medicare Levy.
The Senior Australians and Pensioners Tax Offset (SAPTO) won’t shower you in riches. But depending on your age, relationship status and income, it could provide a handy tax offset of up to $2,230.
With all the announcements on tax over the past few days it’s hard to keep track. So here goes. A year ago the then treasurer Scott Morrison unveiled a “seven year personal tax”.
The Morrison government has delivered an election-launch budget with big personal income tax handouts to attract voters and a A$7.1 billion 2019-20 surplus to display its economic credibility.
For the government this “election budget” is an exercise in juggling. On the one hand, it is throwing out voter bait. On the other, it is running hard on the theme of economic responsibility.
Talk about retrospective. In his determination to quickly inject money into the economy (for economic as well as political reasons), Treasurer Josh Frydenberg has reached back in time to give us an extra tax cut on income already earned during the financial year that’s about to finish.