Disappointing tax returns? Something I’ve been seeing a lot of on social media since the start of the financial year is a lot of, mostly, young Aussies getting a bit of a tax shock. Some are getting disappointing returns or having a tax bill!
If you’ve been working full time for only a few years you may not have known life before the “Lamington.” This was the nickname for the Low and Middle Income Earner Tax Offsets (LMITO).
If you earn under $126,000 per year you would get a boost to your tax return.
This was introduced in the 2018/19 financial year and ended last financial year.
In reality, the way our tax system should work is if you have provided the right details to your employer you should pay the “right” amount of tax each financial year. Then at the end of the financial year, you may get a small return due to deductions. Some occupations have a lot of deductions some have very little.
We all know that no system is perfect so sometimes you may end up with a bill as well. Especially if you have income-deriving investments (shares, term deposits, savings accounts, property, etc.).
Also, need to consider if you have any HELP debt as well. If you earn over $51,550 you will be expected to start paying it back, so you must let your employer know about the debt so they can withhold extra tax.
Salary packaging is another minefield on its own.
As financial planners, we can help you navigate all of the above and even make plans on how to reduce taxes, invest in effective ways, etc.
Be sure to reach out if you had a shock this financial year so we can help you plan for the next financial year.
For any Financial Services assistance, please speak to a Financial Planner now at BW Private Wealth Financial Planning | Ballarat | Ararat | Surrounds
