Tax Offsets differ from tax deductions in that offsets directly reduce your tax payable, therefore can add up to a sizable amount so it pays to know what offsets you are entitled to. Eligibility for offsets will generally depend on your income level, family circumstances and other relevant conditions associated with the particular offset.
Common tax offsets potentially available in the 2012-13 tax year include, among others, the low-income tax offset, medical expenses tax offset, senior Australian tax pensioner offset and the offset for superannuation contributions made on behalf of a low-income spouse. The dependent spouse rebate and the mature age worker rebate may also be available, although these offsets are being phased out.
In addition, the private health insurance offset may be available where an eligible rebate has not been received up front on your private health insurance premiums. However, this offset has now been means tested from the 2012-2013 financial year and a full 30% rebate will only be available where surcharge income is $84,000 or less for singles or $168,000 for families. Where these thresholds are exceeded, the rate of offset reduces until no offset is available for singles and families whose surcharge income exceeds $130,000 and $260,000, respectively, for the 2012-13 year.
