Looking for info on ‘what are tax offsets in Australia’? Here’s a list of tax offsets and rebates you can claim on your tax return to boost your refund:
What are tax offsets in Australia?
Tax offsets and rebates are reduction amounts that can decrease your tax payable or increase your tax refund. These tax offsets (rebates) fall into two categories below:
Non-Refundable Tax Offsets: can reduce your tax payable to $0. See the list below.
- Refundable Tax Offsets: can increase a tax refund. See the list below.
Note: Tax offsets and rebates differ from tax deductions. Tax offset reduces the amount of tax you pay. A tax deduction reduces your taxable income.
1. NON-REFUNDABLE TAX OFFSETS.
Generally, non-refundable tax offsets can reduce your tax payable to nil, however, on its own, they cannot issue you a tax refund. To be eligible you must be an Australian resident for income tax purposes and pay tax on your taxable income.
Depending on your income type and the financial year you’re lodging, you may be eligible for all of the non-refundable tax offsets below:
From 01/07/2022 you are entitled a low income tax offset if you earn up to $66,667.
- if your taxable income is between $37,001 or less, you'll get a maximum of $700.
- if your taxable income is between $37,001 to $45,000, you get $700 less 5 cents for every $1 above $37.5k, ome or all of this offset, click here to see how is calculated.
- if your taxable income is between $37,001 to $66,667, you'll get $325 less 1.5 cents for every $1 above $45k.
LMITO is in addition to the low-income tax offset, to be eligible you must be an Australian resident for tax purposes and pay tax on taxable income.
Small Business Tax Offset is in addition to the low income tax offset, to be eligible you must be an Australian resident for tax purposes and:
- carry on a business as a Sole Trader with a turnover less than $5 million.
- have a share or distribution of net small business income from a Partnership or Trust with a turnover less than $5 million..
- this offset is available from 1/07/2016.
- gives you a tax offset of up to $1,000 to reduce your tax liability in a tax return.
- click here to calculate small business income tax offset.
This calculator helps you determine your eligibility for small business income tax offset and calculates the amount to include in your income tax return.
If you meet the senior tax offset eligibility criteria, you may be eligible for SAPTO. But, you cannot claim the SAPTO if you were in jail for the whole financial year. The SAPTO is determined and automatically calculated by the ATO. The SAPTO is a non-refundable tax offset. If you and your spouse are both eligible for SAPTO, you may be able to transfer your spouse’s unused tax offset to your return. The ATO will calculate your spouse’s transfer amount and include it in your tax return.
2. REFUNDABLE TAX OFFSETS.
Refundable tax offsets can directly reduce your liability to an amount less than zero, resulting in a tax refund. You may be entitled to any of the refundable tax offsets listed below, depending on your income type for the fiscal year you are filing.
Is a Government contribution to help with the cost of your private health insurance. Your eligibility is calculated based on the insurance premium you paid and your taxable income as a single individual or as a combined family.
Available for shareholders, allowing them to claim tax credits for tax already paid on dividends by the company.
The Australian Government pays NRAS contributions via refundable tax offsets. Eligible investors can claim the tax offset through:
An individual, corporate tax entity or super fund is eligible to claim an NRAS refundable tax offset if both of the following are met:
The NRAS tax offset is refundable. This means it can reduce the amount of tax you have to pay to an amount less than $0, which results in a refundable amount.
Here, you’ll find 7 tax offsets and rebates to maximise your tax refund. These include the ATO Low Income Tax Offset for 2024, the Low and Middle Income Tax Offset, the Senior and Pensioner Tax Offset, and the Small Business Tax Offset Calculator to help you determine the amount to put in your tax return.”