It’s tax time, folks! And you know what that means: a glorious tax return that you immediately blow on either an online shopping haul or flights to Bali. Or, if you’re struggling as much as I am in this cost of living crisis, maybe it just means you can turn the heater on during these frigid nights.
Either way, the tax refund is one of the few things we have to look forward to in these trying times — but it turns out this year, your return might be lower than you anticipated. In fact, some people might end up owing tax.
This is because there’s actually been a change to the way tax works this financial year, and you’re not going to like it.
For the last few years, we’ve been benefitting from the low and middle income tax offset (LITMO).
It was introduced in the 2018/2019 budget to give a tax benefit of up to $1,500 for those who earned between $37,000 and $126,000. If you earned between $40,0001 and $90,000 you got the full $1,500.
Losing that $1,500 can sure hurt a tax refund pay cheque, especially if you were only getting a couple of thousand as it was. For some people, it made up a huge chunk of their rebate.
However, the LITMO was actually discontinued in June this year, meaning this will be our first financial year without it in a hot minute.
So if you’re missing $1,500 from your tax return, that’s probably why.
There are still other reasons that your tax refund might be lower though:
- There’s a difference between the details in your tax return and the pre-fill info data
- Your refund has been offset against your debts
- You just earned a different amount or have claimed less expenses this year
If you haven’t done your taxes yet, don’t worry — the ATO reckons it’s better to wait until late July anyway, given that’s usually when all the info it needs from employers and banks has come through.
You’ve got until October to get your shit together — in the meantime, you can read our tax explainer here.
