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I have a tax debt from last year due to my employer not taking out enough tax for my study/help loan. I have nearly paid it off (I'm on a payment plan) but I am wondering how the additional tax relief will work with my situaition. Once I do my tax return, will I recieve the tax cut even though I have a debt? I am hoping so as I'd like to use it towards paying the debt off. I believe with this and my normal tax return I will have enough to pay the debt off and hopefully a little left over. But I have been told to wait until I pay the debt off completely before lodging my return otherwise I won't recieve the extra tax cut. Thanks in advance for any help you can provide me.
Having an existing tax debt does not disqualify you from getting the new tax offset, and this means you do not have to hold off lodging your return because you will recieve the new tax offset regardless and the amount you receive will depend on what your taxable income is.
When you lodge your 2018 - 2019 return, the ATO systems will automatically calculate the tax offset and it will go towards your total refund for that return.
However, after your your total refund (including the tax offset) has been calculated the ATO will then apply that refund to your existing tax debt, which is what you want. This is clearly stated on the ATO website here
It then comes down to what your existing debt is and how much your total refund is (with the tax offset), as to whether you will end up with a liability or a refund after its all been processed.
You can estimate how much your refund will be for the 2019 financial year rtn by using this simple tax calculator:- :https://www.taxcalc.com.au/1819.html
This calculator will work out your refund including the new tax offset, just enter your taxable income at the " Enter your taxable income in dollars: " field and hit enter.
Then you can calculate what your net position will be and decide if you want to lodge your return now or later.
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