Will Your 2024 Tax Return Be Lower Than Usual?

Will Your 2024 Tax Return Be Lower Than Usual?

The end of the financial year has been and gone, and folks are preparing their 2024 tax returns in the hope that they might get a bit of a cash bump at the end of it. If you’re worried your return this year might be similar to last year’s (i.e. lower than usual), you’re not alone. For that reason, we reached out to Mark Chapman, Director of Tax Communications at H&R Block for some insight into what you can expect this year.

What to expect from your 2024 tax return, according to an expert

Well, the answer depends on how you fared with your tax return last year. Chapman explained, “If your circumstances are broadly the same as last year, you can probably look forward to receiving a tax refund that’s comparable to last year’s.”

“The circumstances that led to last year’s tax returns being noticeably lower than previous years – including the abolition of the Low and Middle Income Tax Offset (LMITO) and the increased record keeping requirements around working from home deductions – aren’t being repeated this year. The LMITO is, of course, a distant memory, and more people should have got used to the WFH record-keeping requirements; therefore there won’t be a repeat of the downward trajectory for many refunds this year.”

In short, if your circumstances have not changed, your 2024 tax return is not likely to be lower than your 2023 return. But, if your return last year was lower than usual, then yes, that will probably be the case for you again in 2024 — the new normal post-LMITO abolition isn’t the prettiest, unfortunately.

For those who might need reminding, the LMITO previously delivered a hefty tax break for those earning up to $126,000. However, this expired as of June 30, 2022. The amount you received varied depending on your income, but the maximum offset gave taxpayers $1,500 in their refund. 

Here’s a breakdown of how it worked, via the ATO:

LMITO tax return data. Screenshot via ATO

One thing to keep in mind here, however, is that from July 1, 2024, Stage 3 Tax Cuts are in place for all Aussie taxpayers, so hopefully that helps lessen the blow of a smaller tax return somewhat.

If you’d like to read more about tax returns in 2024, here’s our complete guide on everything from WFH to why you shouldn’t file too quickly.

Lead Image Credit: AMC/ATO

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