You’ve probably heard some media buzz recently about the Low and Middle Income Tax Offset. Often called the LMITO or the ‘Lamington’, the generous tax break was introduced in 2018. It’s recently been extended to cover the 2020-21 financial year.
So why should you care about the LMITO?
Well, now that tax return season is here, the Low and Middle Income Tax Offset is currently putting extra cash into the pockets of thousands of Ezytaxback clients
And there’s a good chance that you’re going to be one of them.
What is it, and who’s eligible?
The LMITO is good news for a lot of people.
It’s a tax offset, not a payment or a refund, so unfortunately you won’t be receiving $1080 in cold hard cash. Instead, the offset reduces the amount of income that you have to pay tax on, significantly boosting the figure you’ll see on your tax return.
Basically, if you’re eligible for the LMITO, then you can expect to see considerably more money in your tax refund. So let’s break down the different offset amounts that you may be eligible to receive:
- If you earnt between $48,001 and $90,000 last financial year, then you’ll be eligible for the full tax offset of $1080.
- Those earning between $90,001 and $126,000 will earn $1080 minus 3% of the portion of your income that exceeds $90,000.
- Earned less than $48,000? Don’t stress, you won’t miss out completely. Those earning between $37,001 and $48,000 will receive an offset of $255 plus 7.5% of the portion of your taxable income that exceeds $37,000.
- Those earning below $37,000 will still receive a LMITO of up to $255.
As you can see, most people are set to receive at least some benefit to their back pocket. Around 4.5 million Australian taxpayers are expected to be eligible for the full $1080 offset, with a further 5.6 million receiving at least a partial LMITO.
How do I access it?
The best thing about the LMITO is that you don’t have to apply for anything.
All you have to do is file your tax return. Once it’s in the system, the ATO will automatically confirm whether or not you’re eligible.
But the LMITO is only one way to reduce your tax. There are a lot other ways you can get more back on your refund. And not all of them are quite as obvious, or as easy to find and claim.
Ezytaxback can make sure you cover everything.
This is why you should always use a registered online tax agent like Ezytaxback to file your tax return. Our advisors will use their years of experience to help you find every avenue for legally maximising your tax return. They’ll make sure you don’t miss anything.
We think that tax savings should be accessible to everyone, so we offer easy online access to a tax agent for a low fixed-fee. With options starting from $49.95, it’s the most cost-effective way to maximise your tax savings without dropping hundreds on an accountant.
Our expert tax advisors will make sure you understand all of the different deductions you can claim, especially around working from home.They’ll also help you take advantage of lesser-known tax legislation to legally maximise your claim.
For instance, the LMITO has gotten a lot of publicity. But did you know you may also be able to claim it’s predecessor, the LITO (Lower Income Tax Offset) at the same time? Those earning below $66,667 may be able to claim additional offsets of up to $700, depending on their income.
This is just one of many different factors that have come together this year to provide Australians with what could potentially be their biggest ever tax refund.
Don’t miss out on huge savings just because you’re determined to DIY it with the myGov portal. Get in touch with your tax agent today to make sure you take full advantage of this year’s tax return.
Disclaimer: This advice is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider whether this advice is suitable for you and your personal circumstances before acting on it.