This year, you may have had a rude shock when opening your notice of assessment from the Australian Tax Office after lodging your individual income tax return.
Many Australians are receiving for the first time assessments that have determined that they owe the ATO money this year instead of receiving a tax refund.
Here are some reasons why you may have a debt in this financial year. :
Expired Or Unavailable Offsets
- This financial year saw many of the tax offsets that had been previously available to use in individual income tax returns reach their cut-off dates or change eligibility criteria.
- For example, the LMITO (low and middle income tax offset) ended 30 June 2022.This added an additional $1,500 to what your ‘debt’ could be subtracted from otherwise. As this is no longer available, you are now without that extra $1,500 to offset the tax debt, resulting in potentially high tax debts this year.
HECS/HELP Repayment Issues
- Your income increased leading to a higher repayment threshold for your study or training support loan.
- You have a study or training support loan and you didn’t advise your employer so they didn’t withhold an amount to cover your repayment liability.
PAYG Withholding Issues
- Not enough tax was withheld from your income throughout the income year to meet your tax obligations because
- you moved into a higher tax bracket – for example, through promotion, or you have multiple jobs or extra sources of income
- you have incorrectly claimed the tax-free threshold for more than one job –see, income from more than one job
- You’re the recipient of Australian Government allowances and payments.
Income-Related Issues
- You receive income as an individual (sole trader) running a business or from a partnership or trust.
- You have income as a sole trader, and you haven’t paid enough in instalments through the income year through the pay-as-you-go (PAYG) instalments system
- You receive additional income through the sale of a capital asset such as real estate, crypto assets or shares, this is a capital gains event.
- You receive income from investments or assets – for example, dividends on shares or rental income.
- You’re earning income from sharing economy activities – for example, ride-sourcing, renting out or sharing assets or providing personal services.
- Changes to your income (or your family status) affect your single or family income threshold, and you may need to pay the Medicare levy or Medicare levy surcharge (MLS).
Other Reasons:
- The amount of private health insurance rebate you receive changes or is too much.
- You have exceeded the concessional contributions cap with your super fund.
- We find a difference between the details in your tax return and the information we receive through pre-fill data or our data matching program.
