Tax warning: Aussies still paying back ATO bill could get slugged again

Some Australians are still paying back the unexpected tax bill they were handed last year and should brace for the same again. The Australian Taxation Office (ATO) has warned there is no extra relief targeted for this year’s claim, which could again mean workers are handed a bill to pay instead of some extra cash.

Like millions of other Australians, Sydney woman Mia was “banking on” getting the “couple of grand” she had become accustomed to at tax time. But the Australian worker was dealt a cruel financial blow that had been cushioned in previous years by the Low and Middle Income Tax Offset (LMITO).

“I ended up owing $1,100 and having to go on a payment plan that I'm still paying off - $35 a week,” she told Yahoo Finance.

She wasn’t alone. Last year, thousands of Australians took to social media to express their dismay at missing out on the tax-time cash boost they expected.

Don't count on $1,500 tax refund: 'No end-of-financial year bonus'

Experts have issued a caution that the era of the end-of-financial year bonus is over for those hoping 2023 was just a bad one-off.

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Finance expert Sarah Megginson told Yahoo Finance that “you can expect this year will be pretty similar to last year.”

“I think a lot of people were surprised last year because the Low and Middle Income Tax Offset was removed. It was worth $1,500 so it was quite a big one,” Finder’s head of editorial said.

What is the LMITO?

The tax break was introduced in 2018 as a means of temporarily boosting disposable income.

From 2019, those earning between $48,000 and $90,000 were granted a tax rebate of up to $1080, which rose to $1500 by 2022.

The LMITO was always designed to be a temporary measure, and despite being extended during the pandemic, was dropped last year.

So, is there any more relief set to help those being crushed by the cost-of-living crisis? In short, no.

What tax relief will I get in 2024?

The ATO confirmed to Yahoo Finance there won’t be any additional boost to individual tax returns this year.

“It’s a bit of a bummer if it's the same as last year because I'll just have another direct debit coming out fortnightly to pay it off," Mia said.

However, the much-discussed Stage 3 tax cuts take effect from 1 July which will make a “very big difference for a large majority of Australians”, according to Megginson.

“When you get your first pay packet in July, you'll notice that it actually has more in it than the previous pay period, because those tax cuts flow directly into your pay,” she said.

“It's not going to impact your tax return, but at least we’ll have a pay rise in July across the board.”

Aussie worker Mia said she was still concerned about owing tax this year and is taking a special precaution she did not last time.

“This year I'll be using a tax person to try and get some more money back,” she told Yahoo Finance.

Last year, Mia was one of 12 per cent of people who said their tax return was "critical" to their budget.

“I’ve always got money back,” she said. “I think last year I needed it for car rego.