The Low and Middle Income Tax Offset (LMITO) is a tax offset for Australian taxpayers who earn less than $126,000 per year. The offset is designed to provide additional tax relief to low and middle income earners. The Australian Government recently announced changes to the LMITO for the 2020-21 income year. This article provides an overview of the changes and the benefits they provide to taxpayers.
Understanding LMITO Changes
The LMITO was introduced in 2018-19 and has been extended for the 2020-21 financial year. The offset is available to taxpayers with taxable incomes of less to $126,000. The amount of the offset depends on the individual’s taxable income, with those earning between $48,000 and $90,000 receiving the maximum offset of $1,080.
The changes to the LMITO announced by the Government include an increase in the maximum offset to $1,080 and a broadening of the income range in which the offset can be claimed. The maximum offset is now available to taxpayers with taxable incomes of up to $126,000. The income range in which the offset can be claimed has also been expanded, with the minimum income threshold for eligibility increasing from $37,000 to $48,000.
Benefits of LMITO Changes
The changes to the LMITO will provide additional tax relief for low and middle income taxpayers in the 2020-21 income year. The increase in the maximum offset to $1,080 and the expansion of the income range in which the offset can be claimed will mean that more taxpayers will be eligible to claim the offset. This will provide taxpayers with additional tax savings, helping to reduce the financial burden of paying taxes.
The changes to the LMITO will also provide greater tax relief to those on lower incomes. Those with taxable incomes of between $48,000 and $90,000 will now receive the maximum offset of $1,080. This will provide additional financial support to those on lower incomes, helping to reduce the financial burden of paying taxes.
The changes to the Low and Middle Income Tax Offset announced by the Government in 2020-21 will provide additional tax relief to low and middle income earners. The increase in the maximum offset to $1,080 and the expansion of the income range in which the offset can be claimed will mean that more taxpayers are eligible to claim the offset, providing additional tax savings and greater financial support for those on lower incomes.