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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. Read more Personal Tax articles.
Norman Ruan
Accountant
T: 02 9984 7774
E: normanr@northadvisory.com.au
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