The Coalition’s $158 billion tax cuts passed the Senate on Thursday July 4, ensuring millions of Aussies will receive up to $1,080 extra in their wallets.

The tax cut package passed through the Senate with bipartisan support however Labor has said it reserves the right to repeal third stage of the massive package. They warn it will be too expensive and disproportionately benefit Australian high income earners.

But that proposed stage won’t come into effect until 2024-25.

You want to know the following now.

How Much Tax Back Will I Receive?

An estimated 10 million Australians will receive tax relief.

For earners up to $37,000: Around 2.3 million people will receive a lump sum payment of up to $255, with earners at the highest end of the income spectrum receiving the most.

For earners between $37,000 – $47,999: Here, 1.7 million earners will receive between $255 and $1,080, with higher income earners once again getting a larger sum.

For earners $48,000 – $90,000: This is the place to be. You will receive $1,080. There are roughly 4.5 million Australians in this bracket.

For earners $90,001 – $126,000: Here, the tax relief drops from $1,080 to $0. There are roughly 1.6 million Australians in this group.

When Do I Receive My Tax Relief?

According to Treasurer Josh Frydenberg,

If you lodged your tax return early you should already be receiving your refund.

If you have not yet lodged your tax return, you should expect your payment in the coming months.

“If the legislation passes this week… the ATO (Australian Tax Office) staff are all ready to move it through the system and people will get it next week,” Frydenberg told Sky News.

“Once they put in their tax returns, if they put in their tax returns next week, they’ll get it just days after.”

How Do I Get My Relief?

You have to lodge your tax return. Once you’ve done this, the money should just automatically appear in your account. This will come through with any additional money you were able to claim on your tax.

So, What Next?

The government hopes this will have a massive boost on an economy struggling wth low GDP growth and stagnating wage growth.

“These tax relief measures will create a flatter and better tax system that will improve incentives for hard-working Australians and ensure that 94 per cent of Australians will face a marginal tax rate no higher than 30 cents in the dollar in 2024-25. Once our plan is fully implemented, around 13.3 million taxpayers will pay lower taxes,” Prime Minister Scott Morrison said.

“Lower taxes are part of our plan for a stronger economy.”

The $158 billion tax plan, of which the $1,080 tax relief packages are one phase, contains two other stages.

Stage two involves seeing the 19 per cent tax rate expanded up to include those earning up to $45,000. This stage will be initiated in 2022-23, and will also see the low income tax offset increased from $445 to $645.

Stage three – the most disagreed upon phase of the package – will see the 32.5 per cent tax grouping increased to include those earning from $120,000 to $200,000. This means removing the 37 per cent tax bracket.

This stage will also include increasing the top tax bracket of 45 per cent from $180,001 to $200,001.

That means by this stage, all earners between $45,000 and $200,001 will be taxed at the same rate. The 32.5 per cent tax rate will then drop to 30 per cent.

Need Help With Your Tax Refund?

The Pisani Group, as one of Adelaide’s premier accounting groups, can provide you with all the assistance you need now that it’s tax time – Including our on line Tax Return option (see web or FB)

Our team of highly skilled and experienced accountants can help you get the most out of you tax return.

If you would like to find out more abut our services or arrange a consultation with one of our accountants, please feel free to get in contact with our friendly team of staff.

We are committed to providing an exceptional standard of service, and will be happy to answer any questions you have or book you in for a tax consultation at a time that is most suitable for you.

Call us on 1800 004 224 or submit an enquiry form on our contact page and we will get back to you with all the information you require.