New tax cuts announced for 2019 will mean a lot of Australians get a nice little boost to their tax refund this year.
Will you be included, and how much money does the tax cut really add to your tax refund?
Like most things at the ATO, it’s complicated. However, the main point is this:
You don’t need to do anything. You’ll get the tax cut automatically.”
Etax calculates your tax refund – including the new tax cuts – and shows your refund estimate, right on your screen. It re-calculates for each bit of info you add. Etax automatically collects your income statement from the ATO, so you don’t need an income statement or PAYG when you do your Etax return. Also, Etax helps you remember items you can claim as deductions, to boost your refund even more.
Now let’s get into some details about the 2019 tax cuts.
“How Much Will I Get?”
2019 tax cuts mostly affect people on low to middle incomes. If you earn between about $21,000 to $126,000 then your tax refund could get a nice little boost in 2019.
|Taxable Income||2019 Tax Rebate |
Taxpayers whose total taxable income lies between $48,000 and $90,000 are eligible for the maximum “low & middle income tax offset” of $1,080.
You can see in the table above how people on high incomes seem to be ignored for 2019. Anyone earning more than $126,000 will not see a change for 2019. However, in future years, people with the biggest salaries will really rake it in – more about that down below.
“How Do I Get My Tax Cut?”
Good news: You don’t need to do anything special.
Just lodge your tax return like normal. The change applies automatically to your tax refund.
Already an Etax user? Just log in here and you’ll be done in a few minutes.
New to Etax? You can create an account here, and it’s going to be easy!
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…finish your tax return in minutes, with deduction finder and help along the way.
What if I already submitted my tax return?
Here’s more good news: You don’t need to do anything.
You’ll automatically get the tax cut added to your tax refund. Or, if you owe taxes, you’ll probably owe a bit less.
“My Tax Cut Seems Too Small”
Okay, here’s where it gets a bit more complicated.
If you already did your 2019 tax return, or if you already started a return at Etax and checked your tax refund estimate, then you already saw an amount that included tax cuts that started in 2018. For a lot of people, that already increased the tax refund.
2019 tax cut changes don’t add on top of those 2018 changes – they replace the older tax cut. So if you already checked your refund, the new difference may look smaller than you expected.
Here’s an example: If you earned around $60,000, then you already had a $530 boost coming your way for 2019 (based on changes introduced in 2018). The new 2019 tax cut does not add on top of that – it just changes how the calculation works, so you’ll get about $550 more than you were expecting (not a full $1080 more like the table shows above).
Another reason for a smaller amount is, you may have owed some tax to the ATO, or to Centrelink or Child Support, and that gets subtracted from any extra you might get from the tax cut.
Some Taxpayers Still Owe Money to the ATO
Most Australians get a tax refund. But every year, some people pay tax instead.
The most common reasons are,
- Your employer(s) didn’t deduct enough tax to cover what you should be paying the ATO.
- You had multiple jobs or sources of income and didn’t pay enough tax for your total income. For example, if you topped-up your income with Uber, AirBNB or some consulting work, all the income adds-up to a total taxable income. As your taxable income goes up, so does the percentage you pay in tax. If each employer knows about the other sources of income, they can adjust your tax withheld rate so your taxes are covered. But it doesn’t always work that way.
- You owed money to Centrelink or Child Support. The ATO automatically grabs your tax refund and sends it to pay for any Centrelink, Child Support or other government agency debt.
How Much Tax Cut Do You Get in the Future?
For people with low-to-mid incomes, the tax cut remains the same or increases slightly in coming years.
That means, next year your refund should be similar to this year (if other things like your tax deductions remain the same). The 2019 tax cut does not keep doubling-up each year.
- A person who earns $35,000 gets an extra $255 in the 2019 tax cuts and that remains the same all the way to 2024/5 – still $255.
- A person earning $60,000 gets an extra $1,080 for 2019 and that crawls up to $1,455 by 2024/5.
For people on high incomes, things keep getting better. High income earners get nothing in the 2019 tax cut, however, in the coming years, those people get a MUCH bigger tax cut than everyone else.
- A person who earns a hefty $190,000 doesn’t get anything extra with the 2019 changes. But pretty soon it’ll go up, a lot. By 2024/5 that person’s tax cut gives them an extra $10,140!
Future Details About the Tax Cuts
Technically, the new tax cuts are a tax rebate, not a cut in tax rates.
The new tax rebate is only temporary, for four years. That means it is gone in 2022, and at that point, “Stage 2” of the tax plan comes into effect.
Stage 2 sees no more tax rebates, but we still get a boost because tax offsets, tax brackets and rates change. Many people will be in a lower tax bracket from 2022 which means they will pay a lower rate of tax – this is an actual tax cut and not a rebate like in 2019. But for low to middle income earners, the effect will be similar to the 2019 changes.
Stage 3 of the plan comes in at July 2024. That’s when tax rates come down in a way that mainly gives a big boost to people on high incomes.
Summary About New Tax Cuts
- Tax cuts = a slightly bigger tax refund for most Australians starting in 2019.
- You don’t need to do anything special. Just lodge your tax returns as normal.
- In your Etax return, after you add the basic details and deductions, you can see a tax refund estimate including the latest tax changes.
- You do not need an Income Statement or PAYG in order to do your taxes – Etax will collect that (and lots more) to automatically pre-fill your tax return, saving you time and improving accuracy.
How to do your tax return:
Click ‘Get Started’ then enter your basic details – Etax does most of it for you AND helps you find deductions.
Need help? There are videos inside Etax, plus accountants are ready to help on phone or live chat.
Sign Your Return. Next, accountants review your tax return and get in touch if there’s something to change or check.
Etax re-checks your tax return to make sure it’s right, then it is lodged to the ATO and your tax refund will be on the way, fast
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Reviews about Etax often mention friendly service, excellent value, the amazing online tax return, bigger tax refunds, or just the comfort of knowing your tax return was checked and done right. The ratings speak for themselves! Etax is Australia’s best-reviewed tax agent on ProductReview, Google and TrustPilot.
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