Comments for Australian Tax

Comment on What is a tax offset? by Calder

Sat, 07 Nov 2009 21:57:41 +0000

Tyson

Firstly, a tax offset is not the same as a deduction.

A deduction is an expense you have paid that you can claim back to reduce your income. The tax you have to pay is calculated on your reduced income. Your rental expense (less than $300) would fit into this category.

A tax offset reduces the tax you have to pay. It is not always related to your work. It can also be an amount the government allows for reasons like low income, living in a remote area or when you have a dependent spouse.

You do not get the full $300 back. Your income is reduced by $300 and your income tax is calculated on this new amount. Basically, if you are in the .15 cent tax bracket (income less than $34,000) you would get .15 x $300 =$45 back. If your income is in the .30 cents bracket, you would get $90 back. The only time you will get the full $300 back is if your income falls below the income tax threshold of $6000. (You would actually get all your tax back if your income goes below $14,000 because the low income tax offset comes into play.)

Be aware that the tax reforms coming in next year will change offsets. Rental losses will be affected.

Comment on What is a tax offset? by tyson

Sat, 07 Nov 2009 13:49:16 +0000

Ive been reading the posts above on the difference between offsets/refunds and am a bit confused. If i have bought an investment property and had to replace the microwave which was less than $300. On the ATO website they discuss the topic of immediate deductions for certain non-business deprecting assets costing $300 or less, for which this qualifies. Now my question is when it comes to tax time will i get the $300 back? or does a refund mean I only get a portion of it back?

Comment on What is a tax offset? by Calder

Tue, 03 Nov 2009 20:36:50 +0000

Mark
My apologises to you also for the delay in responding. Hope it is not too late. If you have submitted your return, you can always do an amendment.
Medicare is best claimed by the one person. Take the information out of one of the returns. The tax office is aimiable enough to allow one person to claim all medical expenses for a family. Naturally, you will make sure that the offset goes against the person it would most help.
Re the chemist expenses. Don’t separate chemist and medical. Note that only scripts can be claimed, not off-the-shelf medicine and incidentals.

Comment on What is a tax offset? by Calder

Tue, 03 Nov 2009 20:28:23 +0000

Hi Penny. Sorry it has taken me so long to get back to you. Unexpected events caused me to be away for the last two months.
Maintenence is what you live on - living expenses which may include accommodation. If you are unsure what is being paid for, it is best to go back to the scholarship provider for full details.

Comment on What is a tax offset? by Mark

Wed, 28 Oct 2009 09:33:31 +0000

We have a query about the 20% tax offset on net medical expenses over $1,500.

My wife and I both work, and both have to lodge a tax return. How do we manage the claim for this?

Is the $1,500 threshold an individual threshold, or a household threshold?

We have auto-filled our medicare details, and that has given us our separate medicare data in our separate tax returns. Are we supposed to also separate the chemist spending and medical expenses?

Or should everything be claimed on one tax return, and nothing on the other?

Thanks!

Comment on Tax training — what’s new this year by Help With Tax

Sat, 10 Oct 2009 05:19:25 +0000

It’s good to know that someone still cares about the help with tax. Awesome post.

Comment on What is a tax offset? by Penny

Wed, 30 Sep 2009 06:42:33 +0000

Hi Calder, it’s a scholarship from the university, but the scholarship does not specified anything for accommodation. Could you please explain what is maintenance? Thanks

Comment on What is a tax offset? by Calder

Sun, 20 Sep 2009 21:01:37 +0000

Is it a government scholarship? If it is, then the maintenance or accommodation component of the scholarship will need to be declared as part of your spouse’s separate net income (SNI) on your tax return. There's a separate net income calculator on the ATO site. Your spouse’s total income (including excempt income) needs to be less than $8,681 to claim the offset, and less that $282 to claim the full offset. A quick calculation:

Tax offset = $2159 - (	Total SNI - $282)	)
	4

Comment on What is a tax offset? by Penny

Thu, 17 Sep 2009 00:41:00 +0000

Can I claim dependent spouse offset if my fiancee is a student (doing phD and receiving tax-free scholarship)?

Comment on What is a tax offset? by Calder

Sun, 30 Aug 2009 05:20:45 +0000

Totally agree, Dave. And if it’s okay with you, I’d like to add this to the body of the post.
Thanks