What are Tax Offsets or Tax Rebates?
Tax offsets, or rebates, are ways in which you can lessen the tax on your taxable income. They are different to tax deductions, which reduce your taxable income. Tax offsets reduce the amount you pay after the Australian Taxation Office (ATO) does its work. Some of them are applied automatically by the ATO. For others, you must apply for independently. Some of the more popular ones include the low income, seniors and pensioners and private health insurance offsets.
What are the types of Tax Offsets?
Offsets such as the ‘low-income tax offset’ are automatically applied by the ATO for those earning up to $66,667. Between the 2019 and 2022 financial years, a low-and-middle-income tax offset was introduced. It is no longer applicable from the 2023 FY onwards. The seniors and pensioners offset is around to help those on Centrelink payments, age pensions or veteran pensions pay their tax. This rebate has more fickle eligibility criteria and effects, it being a great example of how extensive rebates can be. The private health insurance rebate was introduced as a way to help people pay for their health cover. The claiming process is more complex, but our accountants are always happy to help.
As seen above, offsets can be both far reaching and quite niche. Disability, kids, and superannuation are all factors which can influence your tax rebate eligibility. It is worth discussing your options with an accountant to feel your best during tax time.
Consult your Tax Offsets with an accountant
If you are looking for a professional support from experienced Chartered Tax Advisor or Certified Public Accountant, book your appointment with BTMH. We can assist you both in our office in Bondi Junction or connect remotely.