End of Low & Middle Income Tax Offsets
The Low and Middle Income Tax Offset (LMITO) has been a significant benefit for many Australian taxpayers over the past few years. However, changes are on the horizon, and it’s important to understand the implications. In this blog post, we will explore what the LMITO is, its history, and the upcoming changes that taxpayers need to be aware of.
What is the Low and Middle Income Tax Offset?
Australian Taxation Office (ATO) introduced the offset for those recognised as Australian residents for income tax purposes earning under $126,000 as part of a tax cut plan. Between the 2019 and 2021 financial years, the offset amount stayed between $255 and $1080. ATO increased it by $420 for the 2022 financial year, to assist with the increase cost of living.
Changes in the Low and Middle Income Tax Offset in 2023
Anyway, the offset is soon coming to an end. In April 2023, ATO announced that offset will not remain in place after the 2021-22 financial year (after 30 June 2023). It has been said that ATO eliminated this offset to reduce pressure on the federal budget and to prevent another rise in interest rates. Australian taxpayers should be aware that they may need to put some extra money aside towards their future obligations.
For the most recent updates, follow ATO’s official website.
Let us help you with your deductions
At BTMH, we are here to help you navigate these tax changes and maximise your deductions. Our team of experienced professionals can provide expert guidance tailored to your unique financial situation. Contact us today to schedule a consultation and ensure you make the most of your tax return. Don’t miss out on potential savings – let us assist you in achieving your financial goals.