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When do I get my tax cut? It’s complicated

October 13, 2020 - 10:01 -- Admin

When do I get my tax cut? It’s should be a simple question following last week’s federal Budget, but the answer is complicated. What’s actually changed in this Budget? In the last week we’ve heard a lot about ‘Stage 2’ of the Government’s three-stage tax plan. Stage 2 was originally supposed to start in 2022. Now it’s been brought forward. But what’s easy to miss is that Stage 2 doesn’t actually cut taxes for anyone on less than $90,000 a year. For this (very large) group of Australians, it just swaps out one type of tax cut (an offset called the LMITO from Stage 1) with another (a different offset, plus a bracket shift). The two stages are almost exactly identical for people in this income range. That might seem like a pointless exercise, but the Government’s stated aim was to make the tax system ‘simpler’, rather than leaving it cluttered with a bunch of different offsets. This means that

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