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The Lower and Middle Income Tax Offset Has Been Extended Till 30 June 2022, Are You Eligible?

Did you know that the Low and Middle Income Tax Offset (LMITO) is also known colloquially as “Lamington”?

Are you curious about the Low and Middle Income Tax Offset, and if you might be eligible for it this tax time? It might be worth starting a conversation with us about this tax offset, and how you can benefit from it this coming financial year.

The tax offset allows low and middle-income earners to reduce the amount of tax that they pay, but only in such a way that it lowers their tax bill. It cannot be used to generate a tax refund or to pay your Medicare levy, however.

A tax offset is different from a tax deduction. Though both reduce the amount of tax you have to pay, tax deductions reduce your taxable income (such as through work expenses). A tax offset is then deducted from your tax liability (what you owe in total).

Depending on your income, you may be eligible for a tax offset of up to $1,080 this financial year as a single, and up to $2,160 for eligible couples. The LMITO amount will be used to offset (or reduce) the tax you need to pay on your taxable income. The amount of offset received depends on your circumstances, such as your taxable income and how much tax you have paid, it is not a bonus payment.

The Lower and Middle Income Tax Offset has been extended for another year, with the deadline for the offset now set to 30 June 2022.

There is no need to complete anything additional in your income tax return to be eligible for the LMITO. The Australian Tax Office (ATO) will work out whether you are eligible for any tax offsets when it assesses your income tax return on lodgement.

If you are still unsure as to whether or not you’re eligible for the tax offset, you should contact us for more information.

If you’re someone who often finds it difficult to make large lump sum payments for goods or services, you may want to consider looking into “Buy Now Pay Later” services.

Buy now pay later essentially means that, rather than paying in a full lump sum payment for a product or services rendered, there may be an option to pay through instalments of a certain amount over a set period to make the sum of the full amount in total. This method should allow you to pay in full for the product or service without overly straining your finances – you pay back what you can, as agreed upon when you begin the buy now pay later service.

Some popular buy now pay later services include Afterpay, Zip Pay, Brightepay, and some credit card networks such as  Mastercard and Visa, can offer buy now pay later arrangements.

Though it can be a convenient, immediate solution, it may be challenging to juggle the necessary repayments with other financial commitments. It’s not always the most appropriate method for people, and you should bear in mind your situation and ability in paying back the amounts. 

Before you sign up, keep in mind: 

  • It becomes easier to overspend with buy now pay later services, so know your limits on what you can and can’t afford.
  • You will be charged fees and costs to use the service, which can add up to a princely sum in and of itself.
  • Keeping track of your payments can be tricky if you’ve signed up for multiple services.
  • It could affect your loan applications for a car or mortgage as lenders consider buy now pay later spending just as much as your credit score.
  • Late repayments can appear on your credit report, which affects your ability to borrow money in the future.
  • Layby can be a cheaper alternative to buy now pay later, with no account-keeping or late fees to consider

If you are someone who could make use of BNPL services, you may wish to:

  • Ensure that when using the BNPL service, you stick to a set limit on what you spend so that you can comfortably pay it back later. 
  • Aim only to have one BNPL account at a time to manage payments through, rather than confuse yourself with multiple payments across different providers.
  • Always budget for bills, loan payments and BNPL payments, and 
  • Rather than use your credit card for payments to your BNPL account, consider linking to your debit account instead.

If you would like assistance in planning your financial future, help in managing your budget or some friendly advice, see us for a chat about what we can do for you.

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What our Client Say

John Briggs

Jane Noller has been my accountant for the last 15 plus years. I can testify to Jane’s professionalism and expeditious manner in dealing with the day to day issues that surrounds our business accounting.

John Briggs

Registered Building Certifier

David and Alison Parker

I have been consulting J L Noller and Co. (more specifically Jane) for six years and during this time I have found her to be professional, efficient and easy to discuss all accounting and taxation matters with. Her office team are all polite and friendly also.

David and Alison Parker

Business Owner

Carl Gillmore

I have used Jane & the team for the last 6 years for all of my business & personal accounting needs. They have always been professional, easy to talk to & available when we have needed assistance.

Carl Gillmore

Carl Gillmore Landscape

John Briggs

Jane Noller has been my accountant for the last 15 plus years. I can testify to Jane’s professionalism and expeditious manner in dealing with the day to day issues that surrounds our business accounting.

John Briggs

Registered Building Certifier