Tax Offsets | Blog Archives - Advice on Australian Tax Returns & Online Tax Advice on Australian Tax Returns & Online Tax

Category: Tax Offsets | Blog

Tax offsets are also known as rebates to Australian taxpayers. Contrary to popular belief, they are not the same as tax deductions. Offsets directly reduce the amount of tax you must pay to the ATO. Each dollar of a tax offset reduces your tax payable by a dollar. This occurs regardless of your taxable income.

Mature age workers, seniors and pensioners may be eligible for tax offsets. If you are a low income earner, you may be able to claim an offset and, if your medical expenses pass the threshold limit, you may be eligible for the medical expenses tax offset too. You may also be eligible for an offset if you receive income from a superannuation income stream as well.

Questions about offsets? Make sure to leave a comment on our blog posts. We’ll give you the answers you need.

Archive for the Tax Offsets | Blog category

10 Australian Tax Offsets To Claim in 2016

Want to pay less in tax but don’t know how to? We’ll help you out.

There are a few different elements of your tax return that can contribute to reducing how much you owe. Tax offsets are one of those. Alone, they will not get you a tax refund. However, offsets can decrease your tax payable to zero.

Let’s talk about a few that should do the trick for you.


Do you earn less than $66,667?

The low income tax offset (LITO) could be right for you. Although the tax-free threshold applies to everyone, this offset takes it a step further to help out those earning less than $66,667.

The following rates apply to Australian residents over 18 years old for 2015-2016:

  • If your taxable income is $0-$37,000 then your offset amount will be $445.
  • If your taxable income is between $37,001 and $66,666 then your offset amount will be $445 less 1.5% of excess over $37,000.


Do you have private health insurance?

You may qualify for the private health insurance rebate. After lodging your tax return, the ATO will determine how much of an offset they will grant you. Once this determination is made, you’ll be able to choose whether you would like to receive that amount:

  • via your tax return with the ATO; or
  • via a reduced premium.

This rebate is based on your age and income level. The ATO provides a private health insurance rebate calculator on their website to work out how much of a rebate is available to you.


Do you live in a remote area?

Take a look at the zone tax offset. To be eligible for this offset, you’ll need to have lived or worked in one of the following for at least 183 days:

  • Zone A
  • Zone B
  • Special Area

Read the rest of this entry »

How to Claim the Dependent Spouse Tax Offset 2014

“All good things must come to an end”

All good things must come to an end not only applies to your holiday vacation and favorite TV show, but also to -you guessed it- taxation.

As part of the 2014-15 Australian federal budget, the government is doing away with the dependent spouse tax offset (starting on 1 July, 2014).

The good news is you can still claim the dependent spouse tax offset on your 2014 tax return. In fact, E-Lodge has made claiming offsets and deductions effortless. Read the rest of this entry »

Can I Claim the Child-Housekeeper Tax Offset?

The ATO has restricted the child-housekeeper tax offset to those who can claim a zone or overseas forces tax offset

The 2012-2013 tax year has brought with it many changes to what tax offsets are available and how you can claim them:

Another major change deals with how you claim offsets for housekeepers and child-housekeepers.

In previous years you could claim these offsets in the same section of the tax return that you claimed the dependent spouse tax offset. Read the rest of this entry »

How To Claim the Senior Australians and Pensioner Tax Offset (SAPTO)?

Find out who is eligible for SAPTO and the maximum offset you can receive

One of the many tax changes for the 2012-2013 financial year was the creation of the senior Australians and pensioner tax offset (SAPTO).

On 1 July 2012, the pensioner tax offset merged with the senior Australians tax offset (SATO) to create the new offset SAPTO.

ATO calculators

Before we get into the nitty-gritty of who exactly is eligible for the offset, you should be aware that the ATO has several handy calculators that may be able to do some of the work for you.

For the 2012-2013 tax year, the Beneficiary tax offset and seniors and pensioners tax offset calculator 2012-13 can help you determine your eligibility and calculate the amount of the offset you can claim. Read the rest of this entry »

Don’t forget to claim the Dependent Tax Offset for 2014!

Changes for the Dependent Spouse Tax Offset

Although you cannot claim the Dependent Spouse Tax Offset for tax years after 2014, you can claim the Dependent Invalid and Carer Tax Offset for future returns. This offset is for taxpayers who maintain a spouse or relative who is disabled. In order to qualify for this offset, you will need to maintain care for an invalid spouse, parent, child, and brother or sister aged 16 years or older. Relatives will need to be in direct relation to you or your spouse.

In addition to this, the dependent must meet the following requirements:

  • your dependent must be receiving a carer allowance or carer payment
  • they must be receiving a disability support pension
  • they need to receive a special needs disability support pension under the Social Security Act 1991 or an invalidity service pension under the Veterans’ Entitlement Act 1986

For more information on this offset, please go to our blog 10 Australian Tax Offsets To Claim in 2016.


Can I still claim the Dependent Spouse Tax Offset?

In 2013, the government reformed the dependent spouse tax offset. Not only that, but in the beginning of 1 July, 2014, the dependent spouse tax offset was abolished. In other words, you won’t be able to claim the offset on your future tax returns.

Fortunately, when filing prior year returns, you can claim the Dependent Spouse Tax Offset for prior year returns going back to 2014.


Dependent Tax Offset Limitations

For 2013-2014, you cannot claim this offset for a spouse born on or after 1 July 1952. This has been pushed back nearly twenty years from the 2011-2012 birth requirement of 1 July 1971.

You will be able to claim the dependent spouse tax offset regardless of your spouse’s date of birth if you have a dependent spouse who is an invalid or a carer or if you’re eligible to claim any of the following;

  • zone tax offset
  • overseas forces tax offset
  • overseas civilian tax offset

You can no longer claim them as part of question T1 – Spouse (without dependent child or student). You must claim them at item T5 – Zone or overseas forces. To claim the invalid and carer tax offset, you must claim them at item T7 – Dependent (invalid and carer) tax offset. Read the rest of this entry »

Tax Tips: Deductions vs. Offsets

They’re so much alike, yet oh so different on your tax return.

Deduction or offset? These two tax terms tend to get confused but they’re pretty simple to set apart. Let’s take a look at why they’re similar and what actually sets them apart.

What is a tax offset?

Read the rest of this entry »

Tax Time 2012: Changes to the dependent spouse tax offset

Spouses 40 or younger can forget about the DSTO, should get a job instead

Operating from the glaringly obvious assumption that things have changed for women in the workforce since the 1930s, and clearly eager for a budget surplus, the Government has moved to gingerly phase out the costly dependent spouse tax offset (DSTO).

Exceptions will be made for spouses who are invalid, or in some other way permanently unable to get a job. The changes will not apply either to those who are fully engaged as carers, are accompanying their partner on overseas service, or make their home in remote areas.

The new measure, put forward in last year’s budget, is aimed squarely at those unemployed spouses in their 20s and 30s who are in their prime working years but have no children and cannot therefore benefit from the Family Tax Benefit Part A.

Read the rest of this entry »