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Whoever said “there’s no such thing as a free lunch” had clearly never heard about the upcoming stage 3 tax cuts. You’re telling me that for doing absolutely nothing,we’re all getting between $350 to $4500 extra a year in our pay packets? If you ignore the massive cost to the federal budget,the,and the outsized,it sounds a lot like a free lunch to me!
To recap,the stage 3 cuts are the most significant and controversial of the former Coalition government’s income tax reform plan. They are intended to “flatten” income tax rates to reduce bracket creep,which is where rising income leads people to paying higher income tax than they should.
Maximise your stage 3 tax cut by following a few simple tips.Aresna Villanueva
The original plan would have seen everyone earning between $45,000 and $200,000 on the same 30 per cent tax rate,a move that was highly contested and ended up being by the Albanese government this year. You can check exactly how much you’re expected to get back in tax via the ATO’s.
What’s the problem?
With cost of living pressures still high,these cuts will be welcomed by workers,many of whom are still struggling with high interest rates and low wage growth. It’s little surprise then that a Westpac from earlier this year found 30 per cent of recipients plan to save all of their tax cut,while a further 50 per cent expect to save at least half.
What you can do about it
With the extra cash hitting our pay from the end of this month,here are some ways you could make the best of your newfound wealth:
Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.