It may not be the best year for tax refunds, and the disappointment is starting to circulate across the news and social media. We want to clear the air a little bit...
A lower refund may be due to Government/ATO changes, the most common we see are:
Removal of the $1,500 Low and Middle Income Tax Offset
Lowering the standard hourly deduction for Working From Home
These were 'bonuses' we grew accustomed to over the last few years, but it's a tough time for many people to have them ended.
Despite what you may hear, the indexation of HECS/HELP debts does not impact the amount you're required to repay in your tax return! While the jump up in your account balance means it will take longer to pay off, the actual compulsory amount is a direct percentage of your adjusted income - investment and rental losses are ignored, and fringe benefits and extra super are added on.
Spouse (and sometimes ex-spouse) income and taxes can have an impact, too. If your family income is higher than expected, there may be Medicare Levy Surcharge or Centrelink obligations that you weren't expecting. This can feel very unfair if there's been a relationship breakdown or factors out of your control.
Note that ATO and Centrelink debts, even under payment plans, are given first dibs on any refund automatically. Unfortunately we are unable to deal with Centrelink on behalf of clients.
If you have a payable amount for 2023, get in touch and Chromatic may be able to negotiate with the ATO for some extra time to pay; odds are good if you've always been on-time in the past.
Recent Wins:
We recently saved a client $900 in tax by having a phone chat about their work-related expenses
Lodged a return for a single parent, and unlocked family assistance balancing payments for them on top of their tax refund
Obtained lodgement extensions for several business and individual clients
General advice for 2024 and beyond:
Remember, the withholding from your wages is designed to be equal to your tax obligation. If your tax estimate is close to zero, this is the system working as intended!
Make sure your employer/s know you have a study debt so they can withhold enough from each pay
If you have more than one employer, make sure only one (the one you earn the most from) is claiming the tax-free threshold for you
If you have investments or other income on top of your wages, try and tuck away about a third of your profits for tax time. If you're unsure, we can help you monitor the expected tax throughout the year. You will thank yourself later!
Make notes regularly of your work-related car trips and days worked from home, so that you have those numbers ready to go into your 2024 tax return.
Try not to 'spend' your refund before it's received.
As always, the best way to understand where you're at tax-wise is to engage a professional for assistance. The above points are general in nature and cannot be solely relied upon for making financial decisions.
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