The tax rebates announced in 2019 carry over to 2020. Therefore, a lot of Australians also get a nice boost to their tax refund in 2020.
Owed a tax cut in 2020? How much money do the 2019 tax rebates really add to your 2020 tax refund?
The main point to remember is this:
You DON’T receive the tax rebate amount owed to you as a lump sum in your tax refund. The tax cuts reduce your taxable income, which increases your tax refund.
You don’t need to do anything to receive your 2019 tax rebate. The ATO allocates it to your account automatically.
Now let’s get into some details about how the 2019 tax cuts affect you in 2020.
“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 2020. Importantly, the tax rebates are listed on your Notice of Assessment as the “low & middle income tax offset.”
|Taxable Income||2019-2020 Tax Rebate Amount|
You can see in the table above how people on high incomes seem to be ignored for 2019 and 2020. Anyone earning more than $126,000 will not see a change again in 2020. However, in future years, people with the biggest salaries will really rake it in – more about that down below.
“What should I do to get my tax rebate?”
Good news: You don’t need to do anything special.
Just lodge your tax return like normal. The change is automatic and included in your tax refund.
Already an Etax user? Just log in here. A few minutes is all it takes
New to Etax? You can create an account here, and it’s going to be easy!
Etax calculates your tax refund – including the 2019 tax rebates – 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.
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“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. Remember, the tax rebates lower your taxable income. This does not necessarily mean you’ll receive an extra $1080 in your tax refund.
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,
- An 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 Rebates
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.
Stage 3 of the plan comes in at July 2024. That’s when tax rates come down and give a big boost high income earners.
Summary About New Tax Cuts
- Tax cuts = a slightly bigger tax refund for most Australians started in 2019 continues in 2020.
- 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.
Then, Etax re-checks your tax return to make sure it’s right. Finally, it is lodged to the ATO and your tax refund will be on the way, fast
Etax Rated Number One by Australians
Etax won the Canstar Blue 2018 “Most Satisfied Customers Award” for tax agents.
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.
Easiest Tax Return Ever!
“Easiest tax return I’ve ever done. Incredibly simple, step by step process that helps you get the maximum return you are fairly entitled to. I’ll be using this system every year from now on!”
—posted by ‘Griffinlay99’ at Product Review, July 2019
Fantastic – this takes all the stress out of lodging my tax return
Your site improves each year – it’s just great! I don’t have to worry about changes to legislation as it is all included in the next version of your software. So easy!
-Aws, from ProductReview, July 2019
Fast easy and everything is pre-filled to save time
plus they double check to make sure you get the most return you should get, for the small amount they charge it’s much easier and cheaper than the big name Tax Agents and I don’t have to leave home to get it done for the same if not more return :)
-Gardum, from Google Reviews, July 2019
Easy way to get your tax return done
…takes 15 minutes at the most and they help you with what you can and can’t claim!
-Matthew S. from Google Reviews, July 2019
So Easy and fantastic help with questions
I was told about Etax by a friend as I used to do my taxes via MyGov. To be honest this made my life so much easier and I was able to obtain all my deductions that I was entitled to. Highly recommend.
-Nerissa in Tasmania, from ProductReview, July 2019
Easy to manage and put through
The process is simple and it was a breeze to get through. The fact my salary was already known made it brilliant. I will recommend it to everyone I know.
-Shane S. in Hobart, from ProductReview, July 2019
Have used this service for years
So simple and it remembers everything you selected from the year prior which makes your next one so easy! Great company.
-Amy D. from Google Reviews, July 2019
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