Did you know that the Low and Middle Income Tax Offset (LMITO) is also known colloquially as “Lamington”?
Are you curious about the LMITO, and if you might be eligible for it? It might be worth starting a conversation with us about this tax offset and how you can benefit from it.
The tax offset allows low and middle income earners to reduce the amount of tax they pay. The offset cannot generate a tax refund or pay the Medicare Levy.
A tax offset is different from a tax deduction. Though both reduce the amount of tax you have to pay, tax deductions reduce your taxable income. A tax offset reduces your tax liability (what you owe in total).
Low and Middle Income Tax Offset Amount
Your income determines the amount of tax offset received of up to $1,080. The amount of offset received depends on your circumstances, such as your taxable income and how much tax you have paid. The maximum amount is received if your taxable income is between $48,000 and $90,000. The offset fazes out as your taxable income heads towards $126,000. If your taxable income is more than $126,000 no offset is available. The base amount of $255 is available to individuals who have taxable income of less than $37,000. The ATO will use the LMITO to offset (or reduce) the tax you need to pay on your taxable income. Unfortunately, it is not a bonus payment.
The deadline for the LMITO is now 30 June 2022, an extension for another year.
There is no need to complete anything additional in your income tax return to be eligible for the LMITO. The Australian Tax Office (ATO) will determine whether you qualify for any tax offsets when it assesses your income tax return on lodgement.
Contact us if you are still unsure whether or not you’re eligible.
