Your 2022 – 2023 Tax Reurn

Your 2022 – 2023 Tax Reurn

The ATO has made some changes that may affect your tax refund. It may be vastly lower than you think, or you may receive a tax bill! This could be for numerous reasons, including:

  • The Low and Middle Income Tax Offset (LIMTO) has ended
  • Your credit or refund has been offset
  • Your income has changed from previous years
  • The ATO’s data matching system detects differences in your declared income and the income information they receive through pre-filled data
  • You have not advised your employer of a study or training support loan and you earned more income than the minimum threshold

 

Low and Middle Income Tax Offset (LITMO)

The LIMTO ended on 30 June 2022. The 2021-22 financial year was the last year the LITMO could be claimed. This was applied automatically to your tax return. The LITMO won’t be available from the 2022-23 financial years and onwards.

The LIMTO was only available from the 2018-19 to 2021-22 incomes years and was paid in addition to the Low Income Tax Offset (LITO). You must also have been an Australian resident for taxation purposes.

Offset credits on your tax refund

In compliance with legal requirements, if you have an outstanding debt with the ATO, including a debt on hold, they are obligated to utilize any credits or refunds that you may be entitled to in order to offset the debt. This process is commonly referred to as offsetting.

However, there are specific circumstances where they have the discretion to refrain from offsetting. If you are experiencing serious financial hardship, there is a possibility that they may be able to issue the refund directly to you instead.

Changed Income

If your income has changed, you may incur more or less tax.

Discrepancy in data

In order to streamline the tax return process and ensure accuracy, the ATO use pre-filled data on your tax return. This data is obtained from various third-party sources, such as health funds, financial institutions, employers, and government agencies.

The pre-filled data becomes available from 1 July, and the majority of the information is finalized by the end of July. However, certain data, such as partnership or trust distributions, may be received at a later date.

Your tax agent will verify if your pre-filled data has been uploaded.

Compulsory payments

Repayments for your study and training support loan are automatically deducted through the income tax system, eliminating the need for you to provide loan information in your tax return. If you have an outstanding loan at the time of lodging your tax return and your repayment income exceeds the minimum repayment threshold, the ATO will calculate your compulsory repayment and include it in your notice of assessment. This applies even if your tax return covers a period prior to your commencement of studies.

Ref: Why is my 20230 tax return lower than last year? (itp.com.au)

 

 

 

Are you looking for an advisor that will keep you up to date and provide guidance and tips like in this blog? Then why not contact me at our Falconbridge office or Luera office in Blue Mountains office to arrange a one-on-one consultation. Just Book Free Consulation up on the right to find the appointment options.

 

Yan Qi CA

 

 

 

 

Mobile: 0403 050 779

This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. This website provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.