Want to pay less in tax but don’t know how to? We’ll help you out.
There are a few different elements of your tax return that can contribute to reducing how much you owe. Tax offsets are one of those. Alone, they will not get you a tax refund. However, offsets can decrease your tax payable to zero.
Let’s talk about a few that should do the trick for you.
Do you earn less than $66,667?
The low income tax offset (LITO) could be right for you. Although the tax-free threshold applies to everyone, this offset takes it a step further to help out those earning less than $66,667.
The following rates apply to Australian residents over 18 years old for 2015-2016:
- If your taxable income is $0-$37,000 then your offset amount will be $445.
- If your taxable income is between $37,001 and $66,666 then your offset amount will be $445 less 1.5% of excess over $37,000.
Do you have private health insurance?
You may qualify for the private health insurance rebate. After lodging your tax return, the ATO will determine how much of an offset they will grant you. Once this determination is made, you’ll be able to choose whether you would like to receive that amount:
- via your tax return with the ATO; or
- via a reduced premium.
This rebate is based on your age and income level. The ATO provides a private health insurance rebate calculator on their website to work out how much of a rebate is available to you.
Do you live in a remote area?
Take a look at the zone tax offset. To be eligible for this offset, you’ll need to have lived or worked in one of the following for at least 183 days:
- Zone A
- Zone B
- ‘Special Area’