The salary you need to earn to get a $2,400 windfall come tax return time

The salary you need to earn to get a $2,400 windfall come tax return time
The salary you need to earn to get a $2,400 windfall come tax return time

Australians earning $120,000 a year are set to receive a tax cut of up to $2,430 when they submit their tax return.

The Covid pandemic caused economic upheaval and saw the federal government last year delay the budget by five months to October.

Tax relief for the wealthy, announced in the 2019 budget just before the election, wasn't meant to come into effect until July 2022.

But under last year's pandemic budget, this was backdated to July last year.

This means those earning $90,000 to $120,000 will pay 32.5c in the dollar instead of 37c when they submit their tax return for the 2020-21 financial year.

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Australians earning $120,000 a year are set to receive a tax cut of up to $2,430 when they submit their tax return. Tax relief for the wealthy was brought forward as the pandemic caused economic upheaval (pictured is Sydney's Barangaroo)

 Australians earning $120,000 a year are set to receive a tax cut of up to $2,430 when they submit their tax return. Tax relief for the wealthy was brought forward as the pandemic caused economic upheaval (pictured is Sydney's Barangaroo)

Australia's three stages of tax cuts

Tax cuts of $255 for those earning between $18,200 and $37,000 were legislated in July 2019.

Those earning $48,000 to $90,000 saw their tax cuts double from $530 to $1,080.

The government's tax cuts package, announced in the April 2019 pre-election Budget, had three stages.

Stage one increased the threshold for the 32.5 per cent personal income tax bracket from $87,000 to $90,000, over four years until 2022.

Stage two, increases the 19 per cent personal income tax bracket from $41,000 to $45,000. It also raises the 32.5 per cent personal income tax bracket from $90,000 to $120,000.

Stage three would see the 37 per cent tax bracket abolished from July 1, 2024 and a new 30 per cent tax bracket created for all individuals earning between $45,001 and $200,000. The number of tax brackets would be slashed from five to four for the first time since 1984  

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H&R Block director of tax communications Mark Chapman said Australians of all income levels were in for a treat this year.

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'Australians will get a bumper tax return this year,' he told Daily Mail Australia.

More than 10 million Australians are set to get generous tax refunds, and those prepared to do extra paperwork in line for a bigger windfall in the thousands.

Treasurer Josh Frydenberg in the May 2021 budget extended the low and middle-income tax offset for those earning up to $126,000.

In the 2020-21 financial year just gone, 4.6 million Australians earning between $48,000 and $90,000 will receive $1,080 as another 1.8 million people earning $37,000 to $48,000 get back $255.

Those earning between $90,000 and $126,000 will get back a smaller amount.

An Australian on an average, full-time salary of $90,000 is already set to get back $1,080.

But because the tax offsets were delayed by five months last year, someone stands to get an extra $400 on top of that based on  $20 a week foregone times 20 weeks.

Together, that takes the tax offset relief to almost $1,500 for an average income earner.

Australia's 10 million people earning up to $126,000 have until October 31 to submit their tax returns online if

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