The Scott Morrison government released its Federal Budget on Tuesday night and it includes a tax offset for Australians earning up to $126,000 a year.
“The Government is more than doubling the low- and middle-income tax offset from 2018-19. Taxpayers earning up to $126,000 a year, including teachers, tradies and nurses, will receive a tax cut,” Treasurer Josh Frydenberg said, while delivering his first Federal Budget in Canberra.
A single-income family will receive up to $1080 per year, while for a family with dual income the amount will increase up to $2,160 per year. The government said 10 million taxpayers will receive the tax offset, with 4.5 million Australians getting the full amount.
If you are eligible, you will receive the amount after completing your 2018/2019 tax return in July this year. Frydenberg claims it “will lift household incomes, ease cost of living pressures and boost spending at local businesses.” The tax offset will be available for the next four years.
But, don’t get too excited. If you don’t earn in the sweet spot from $48,000 to $90,000, you’ll get substantially less off your tax. People earning up to $37,000 will get their tax reduced by $255, while those earning closer to $126,000 could get closer to zero.
This graph should help:
And here is a handy PDF.
The Coalition also needs to stay in government at this year’s election. If they do, the tax offset will be available for the next four years.
The government also announced it would reduce the tax rate for those earning between $45,000 and $200,000 from 32.5 percent to 30 percent. They say this will affect 94% of Australians. Unfortunately, to take advantage of this change, it will be a mighty long wait. The government doesn’t plan to roll this out until July 2024.
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