Proposed increase for individual tax offsets | North Advisory

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    Proposed increase for individual tax offsets

    Posted by Northadvisory on April 12, 2019

    With the 2019 federal budget, the treasurer announced that the federal government intends to increase the low and middle income tax offset (LAMITO). If enacted, the increase would begin in the current 2018/19 income year. The announcement also confirms that the LAMITO would only run for four years, from the 2018/19 to the 2021/22 income year.

    The table of the current law next to the proposed changes, as it relates to the 2018/19 and following income years, is below:

    Taxable income

    Current law

    Proposed change

    Less than $37,000

    $200

    $255

    Between $37,000 and $48,000

    Increase 3c per $1, capped at $530

    Increase 7.5c per $1, capped at $1,080

    Between $48,000 and $90,000

    Maximum $530

    Maximum $1,080

    Between $90,000 and $126,000

    Reducing from maximum at 1.5c per $1

    Reducing from maximum at 3c per $1

    Above $126,000

    $0

    $0

    In both scenarios, taxpayers between $48,000 and $66,667 will have a reduced Low Income Tax Offset with the maximum level of LAMITO.

    At this stage, the proposed changes are at announcement phase and have yet to be introduced into parliament. However, it has been stated by the current federal opposition that they intend to legislate the proposed change.

    We will keep you informed of any changes as they are announced.

    If you have any questions, please do not hesitate to contact us.

    Norman Ruan
    Accountant
    T: 02 9984 7774
    E: normanr@northadvisory.com.au