Somehow the word tax sends chills down our spine. But there is nothing to fear about taxes. According to most tax experts, generally, people don’t have the common basic knowledge of common taxes such as professional tax, business tax liability, and taxes on your income.
Unfortunately wanting to save tax but not willing to learn about approved tax offsets do not come at par. If you have to save tax then you got to know about some basic eligibility criteria for it.
In this article, we are going to find out about some of the basic tax offsets in Australia for the commoners.
Let’s get to know about them.
What does the Australian Tax Office suggest for tax offsets?
The top taxation authority in Australia resides with the Australian Tax Office board and it does allow Australian citizens or taxpayers to make use of tax offset rules to reduce their taxable income from a financial year.
Making use of these tax offsets can provide you a reduction in your taxable income and this in turn reduces the amount of tax you need to pay.
Now if you have let’s say for example 2000 AUD to pay in taxes but your tax offsets make you qualify for 2500 dollars you won’t have to pay any tax.
What are the main eligibility criteria for getting tax offsets in Australia?
The ATO defines various sorts of tax offsets depending on the type of entity you are.
Low and middle-earning groups
The two tax credit systems available include the Low and Middle-Income Offset (LMITO) and the Low Income Tax Offset or the LITO. The ATO tells that if you qualify for any one of the two then you make use of the tax offsets. They fill in automatically during your filing.
Superannuation tax benefits
The Australian Tax offset eligibility states that those people who are contributing to their superannuation or even their spouse’s superannuation can make use of the tax offset schemes to the amount of contribution in full. But this will depend on the age of your spouse, the total assessment income for that year, and report fringe benefits too.
Private health insurance offset
The ATO states that the Australian government is providing a private health insurance refund. If you have existing policies in an approved and affiliated private health insurance company provides you with a deduction of some part of your insurance premium as a tax offset.
Senior citizen’s and pensioners’ tax offset
This rule applies to pensioners and senior citizens and states that any senior citizen above the age of 65 years and receiving an Australian government pension is liable to get a tax offset based on the income and asset levels for a filing year. you may check out the ATO website as to how much tax offset you are eligible for by furnishing all necessary details on the ATO website.