Tax returns 2021: Why your refund could be smaller this year
Covid-19 pandemic had a toll on everything, be it the global economy, mental and physical wellbeing of human beings on the macro level, or a single family’s circumstances, their survival during financial crisis at the micro level. While Australia is still coping with recession, the job losses have caused disequilibrium and panic in society. ‘Tax refund’ in such times becomes a ray of light at the end of 2021 financial year.
The question that is affecting Australian today is whether they will be getting a higher or lower refund in 2021. Although thousands of Australians lost their jobs in 2020 during the pandemic, the Government of Australia had left no stone unturned, to help its people. The introduction of various credits, stimulus or as we may call it economical help, kept the economy going. Answering the higher or lower refunds, we might assume that as we lost our jobs, the amount we paid as taxes while we were still working for the same job must have been deducted at a higher rate because of the tax bracket that we fall in usually. The “overpaid” tax raises our hope to get back a higher refund, Right? Now let us see it the other way, the Jobseeker and the Jobkeeper payments were never tax-free payments. As a taxable income, you must consider them while calculating your actual tax payable for 2021 financial year. In addition, the tax on these stimulus payments was deducted by the employer at a lower marginal rate, which in fact was much below the actual amount of tax payable on these payments.
Considering the low-income tax offset and, low and middle income offset still being applicable, the Australians who earned income below the tax-free threshold before, can now be liable to pay taxes on the taxable income they earned through the government stimulus. The tax offsets are not additional money, they can only increase a tax refundable or reduce a tax payable.
Low-income Tax Offset (LITO)
|Taxable Income||LITO for 2021|
|$0 to $37,500||$700|
|$37,501 to $45,000||$700 – [(taxable income – $37,500) x 5%]|
|$45,001 to $66,667||$325 – [(taxable income -$45,000 x 1.5%]|
Low- and Middle-Income Offset (LMITO)
|Taxable Income||LMITO for 2021|
|up to $37,000||$255|
|$37,001 to $48,000||$255 plus 7.5 cents for each dollar over $37,000|
|$48,001 to $90,000||$1,080|
|$90,001 to $126,000||$1,080 less 3 cents for each dollar over $90,000|
To know more about tax offsets, click here to see ATO updates directly.
The other reason why the refund can be lower in 2021 financial year’s tax refund can be the hurry to lodge 2021 tax returns as soon as the tax season starts in July 2021. To get financial relief or their refund back, people might not wait till all the information is uploaded on the ATO records. The unfinalized payments or unfinalised information on ATO Portal can cause huge discrepancy in the amount that they receive by lodging it before it finalizes. This might cause them extra time and efforts to get their amendments done later and pay more for it.
My Tax Refund Today is one stop shop to clear all your doubts and concerns regarding your tax returns every year. We have a dedicated team to address all your queries and get maximum refunds. We discuss in detail all relevant information applicable in your case, all the offsets that you are eligible for just to keep you updated and one step ahead regarding latest tax laws.
My Tax Refund Today is one of the most successful accounting businesses which has harnessed the power of technology with the strength of customer service to enable clients all over Australia to lodge their tax returns online. With a 4.7 Star Google rating and having served more than 20,000 clients over 5 years, My Tax Refund Today is one of the biggest Tax Agents in NSW.
Fill in the formHERE to have an expert call you and get you same-day refund*, or if you have an questionsrelate toMytax 2021 , andmyGov ,Online Tax Return 2021, you can contact us by calling 1300 698 297 Or email us at firstname.lastname@example.org
This disclaimer informs readers that the views, thoughts, and opinions expressed in the text belong solely to the author, and not necessarily to the author’s employer, organization, committee or other group or individual. To have your tax case assessed please contact a registered tax agent.