Are you eligible for a tax offset?

If you are an Australian resident for income tax purposes and you pay tax on your taxable income, you may be eligible for both the low and middle income tax offset.

This graph from the ATO gives an indication of how the tax offsets could work for you based on your income.

But what is a tax offset?
A tax offset means you pay less tax (also known as your tax payable) on your taxable income (that is, your total income minus any deductions).

This tax offset can only reduce the tax you pay to zero, so if your taxable income is $18,200 or less and you haven’t paid any tax, an offset can’t reduce the tax you pay, as your tax payable amount is already zero.

But, if have paid any tax on this income, you will generally receive all of this tax back as a refund – your tax payable amount is zero so no offset can be applied.

If your taxable income is $18,201 or more, the ATO uses your taxable income to work out how much tax you’re required to pay.

There are two types of tax offsets

Low income tax offset
The maximum low income tax offset is $445. If your taxable income is $37,000 or less you will get the full offset of $445. The low income offset amount is then reduced by 1.5 cents for each dollar over $37,000.

Low and middle income tax offset
This tax offset could be added to the low income tax offset depending on your income. The low and middle income tax offset amount is between $255 and $1,080.

The full offset is $1,080 per annum, but you might not be entitled to the full $1,080. The base amount is $255 per annum.

The amount of offset you receive depends on your circumstances, such as your taxable income and how much tax you have paid.|

No extra forms to fill out
You don’t need to complete anything in your tax return in order to access the low or low and middle income tax offset. The Tax Office works out the amount of this tax offset for you once you lodge your tax return.

If you receive a tax refund it will be deposited into your nominated bank account. Any refund may also be reduced by any debt you have with the ATO or any Australian government agency, as the law requires them to use refunds or credits to pay debt.

Please Note: Offsets also can’t reduce your Medicare levy and Medicare Levy Surcharge (if any). The Medicare levy is 2% of your taxable income, in addition to the tax you pay on your taxable income.

To see if you are eligible for these Tax Offsets, please contact us on (07) 3804 7575, or just go online and make an appointment. We can explain how it works when you come in to see us.

Three Quick Tips for a Better 2020 Tax Refund

Tax refunds can feel like an early Christmas present. It’s the bonus payment into your bank account that you can use for a shopping spree, getting rid of some debt or adding to your savings.


Here are three quick tips to help you maximise your 2020 tax refund:

1. Be organised!

Keeping orderly records with a simple filing system can save you thousands in tax deductions. One of the easiest ways to increase your tax refund is to file every receipt for every deductable expense in a filing cabinet or expandable file.

Or if you prefer, create an electronic file on your computer or phone, where you can scan and save receipts and other records of your expenses.

Even if it’s too late for this year’s return, setting up your filing system and taking just a few minutes each week to file every receipt is one easy way to ensure you get the best possible tax refund in the future. Make sure you include the small items too. They all add up!

2. Claim deductions for everything you are legally entitled to claim.

The simplest way to increase your tax refund is to claim deductions on all of the expenses you are legally entitled to claim.

There are many legal ways to increase your refund, so if you aren’t sure whether you can claim a certain item or type of expense, just keep your receipt and ask your Instant Tax Refunds agent to help assess your claim. We know how to help you get the biggest legal refund possible.

3. Use our online Instant tax return application form.

Australia’s tax legislation is over 15,000 pages long –And who wants to read that? (Well… we do so you don’t have to!)

Our online tax return application has been designed by our trained accountants to unravel the complexities of the Australian tax system and to come up with the easiest-to-use tax form that also covers the wide range of deductions you need to get the best tax refund possible.

So use these three tips if you want to be confident of the best possible tax refund and use the Instant Tax Refunds online form or call us now.

Be aware – The ATO is targeting COVID-19 fraud

The ATO is targeting schemes designed to take advantage of the government’s COVID-19 stimulus package. This includes JobKeeper, early release of superannuation, and boosting cash flow for employers.

ATO Deputy Commissioner, Will Day said that with so many Australians impacted by COVID-19, the ATO’s priority is to ensure payments get to those who need them.

“We know the overwhelming majority of Australians are honest, and we’ve worked hard to help those people who are impacted by COVID-19 as quickly as possible.”

“We also have an important role to ensure the integrity of the stimulus measures and when we uncover fraud or people seeking to exploit them, we’ll take action, as we know the community would expect us to do.”

The reality is that the ATO has access to a large number of data sources that it uses to assess the risk of illegal or inappropriate behaviour. These sources include Single Touch Payroll, income tax returns, and information reported via super funds, as well as data from various third-party sources.

The Australian tax system works on a self-assessment model. It generally operates on the basis Australians are honest, meaning they will accept the information provided as true and correct and make payments accordingly.

But the ATO has also made it clear it will not tolerate illegal behaviour or development of schemes that are designed to deliberately exploit these measures, seek to avoid tax, or prey on vulnerable Australians.

The ATO has already received intelligence about a number of dodgy schemes, including the withdrawal of money from superannuation and re-contributing it to get a tax deduction. Not only is this not in the spirit of the measure (which is designed to assist those experiencing hardship), severe penalties can be applied to tax avoidance schemes or those found to be breaking the law.

Penalties for fraud can include financial penalties, prosecution, and imprisonment for the most serious cases.

However, be aware that the ATO will be conducting checks later, so if you’ve received a benefit as part of the COVID-19 stimulus measures and it is discovered you are ineligible, you can expect to hear from them

If you think this may apply to you, you should contact us now.

It is much better to come forward to make a voluntary disclosure than wait to be audited.


Calculating tax deductions for car expenses.

If you use your own car in performing your work-related duties (including a car you lease or hire), you may be able to claim a deduction for car expenses. Read more