Wednesday, 25 September 2013

Tax tips, part 17: tax offsets

After you’ve dragged yourself kicking and screaming through income and deductions, the remainder of your tax return is generally a piece of cake.  There are umpteen questions, loosely grouped into offsets (T1-T11), adjustments (A1-4), credits (C1), Medicare (M1-M2), and income tests (IT1-8).

If you are entitled to an offset, it’s fantastic, as they directly reduce the amount of tax payable on your taxable income (as opposed to deductions, which only reduce taxable income).  However, I’d say 90% of these wouldn’t apply to most people, ever.  Occasionally you may be able claim for large medical expenses and whatnot.  But who does the landcare and water facility apply to?

What you can claim

The offsets, rebates, adjustments, and so on fall under the following categories:

  • T1 - Spouse (without dependent child or student)
  • T2 - Seniors and pensioners (includes self-funded retirees)
  • T3 - Australian superannuation income stream