Why Your Tax Refund May Be Lower This Year?

Why Your Tax Refund May Be Lower This Year?

Tax season can be a stressful time for many people especially these year where the Government has dropped low and middle income tax offset (LMITO).  Therefore, if you were expecting a large refund to cover some of the cost of living increases you may be in for a surprise as the LMITO accounted for up to $1080 for individuals earning between $48,000 and $90,000.  Without this offset, many Australians will see a reduction in their tax refund.

INFLATION

Another factor that could impact your tax refund is inflation.  With inflation still very high, the value of your refund may not go as far as it did in previous years.  According to recent reports, taxpayers who had their refunds processed got refunds that were on average 9.3% less than last year.

WHAT CAN YOU DO?

Whilst there’s not much you can do with regards to the changes to the LMITO and Inflation, you can still take steps to maximise you Refund by claiming all the available deductions that you’re entitled to.

Deduction expenses that relate to earning your income, such as work-related expenses or charitable donations.  Keep track of all your receipts and enter them into personal accounting software such as Xero or MYOB.  You can also make contributions to superannuation which are taxed at a lower rate than your regular income.

Finally, consider using a registered tax agent. Tax agents are professionals who are trained in preparing and lodging tax returns and can provide valuable adivce on how to maximise your Tax Refund often offsetting their costs.