Low income tax offsets
Sunday, June 24th, 2007There are a lot of tax offsets increasing their thresholds from 1 July 2007. Must be an election coming up soon.
A tax offset is a money the government gives back to you to help reduce your tax debt if you are a low income earner. Please not, this is not money back, it just reduces your tax liability. It will not go below zero (with a couple of exceptions and these have been mentioned in an earlier blog).
There were changes from July 1, 2006. There are more coming up from 1 July 2007. In brief, they are:
- Low income offset: Increase from $600 to $750 per year.
- Senior Australians tax offset: Pay no tax up to $25,867, up from $24,867 for singles. For couples, $43,360 up from $41,360.
- Dependent spouse rebate: Increase from $1,655 to $2,100 per year.
- Medicare low income threshold: Increases to $16,740 for individuals and $28,247 for families. Additional amount for each dependent child will increase to $2,594.
- Pensions below pension age will increase to $21,637.
It may not mean much now, but you will notice it come tax time next year.