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Offset claim

In addition to claiming allowable deductions, you may be entitled to claim tax offsets. Tax offset is also known as rebates. Tax offsets immediate reduce the amount of tax payable on taxpayer’s taxable income.
Offsets can minimize the taxpayer’s tax payable to zero, but on their own they cannot get a refund. When taxpayers are eligible for more than one offset, they are applied to your gross tax payable, according to the order stated in tax law.
Some methods to settle offset claim are:

  • Benefits recipients: The beneficiary tax offset is available to tax payers who are entitled to receive certain Australian government allowances and payments.
  • Taxpayer with dependents: A taxpayer may be eligible for an offset if taxpayers take care of spouse or dependent relative who is invalid or carer.
  • Health insurance: A taxpayer is entitled to private health insurance rebate or tax offsets depending on the age of the oldest person covered by taxpayer’s policy and taxpayer individual or family income.
  • Medical expenses: The Net medical expenses tax offset is phased out. To be eligible to claim, taxpayer must complete certain criteria and have incurred medical expenses over the applicable claim threshold. The threshold applied is dependent on taxpayer family status and adjusted taxable income (ATI). The thresholds are indexed each year.
  • Low income earner: Low income earner will also be eligible for a tax offset- for example low income earner only work part time. They don’t have to claim this offset- ATO will work it out for low income earner when they file their tax return.
  • Zones and overseas forces: A taxpayer may be eligible for an overseas forces or remote zone tax offset, but not both.

Overseas forces tax offset – specified localities
Taxpayers may be eligible for an overseas forces tax offset if:

  • They served in a specified overseas locality as a member of the Australian Defense Force or a United Nations armed force in the last financial year.
  • Income relating to that service was not specifically exempt from tax.

Current specified localities for the purposes of the overseas forces tax offset

If taxpayers rendered any services in any of these localities as a member of the Australian Defense Force or of a United Nations armed force during the previous financial year, they may qualify for an overseas forces tax offset.
If they served in a locality in an earlier income year and it was a specified locality when they served there, they may be qualified to claim the overseas forces tax offset in that income year.

For more information on offset claim from ATO website by clicking here.

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