Low earner tax offset

[aratic]

Hi,

Seeing the other tax thread I thought Id ask this here as there seem to be a few accountants on here.

The misses and I moved to Australia at the beginning of the year and started working shortly afterwards. We have done our tax returns using etax and the estimate it gave us included for a fairly healthy 'low earner tax offset'. The thing is that our salaries are both over 50k a year however because we have only been working roughly 5 months our gross income is quite low and it is indicating we should get this back (as it must be based on gross earnings for the financial year, not what you would've earned if working for the whole year).

Question is, will the ATO see that we have only been working for half the year and not give us this tax offset as apart of our refund?

Cheers

[thefightback]

You will get it as it is based on what you have earned for the financial year, doesnt matter if you worked a day or a year.

I'm the same - only worked part of the year. Nice to get a decent return for a change!

[aratic]

I hope your right, would be a nice bonus.

I'm not all that confident though, as we only got our TFN's in February...

[white lie]

I'm not sure how it works if you weren't an Aus resident for part of the year but provided you ticked that box and put in the correct details, then the estimate will be correct. As mentioned above, if you were a resident for the whole year and only worked half the year, then the taxable income and tax payable is calculated on what you earnt over the year, not over the period you were working.

[Grommz]

Ive been working at my current job only 5 months and i got tax'd like 8k for not even half a year.

The ATO has had a bit of back and forth with me since i lodged my return questioning why id had some much tax taken etc. I just explained to them id only been there 5 months and the next day they sent me my estimated refund.

:woohoo:

[NickS]

Ive been working at my current job only 5 months and i got tax'd like 8k for not even half a year.

It's very different when you have been a resident all year but have only worked part of the year.

To the OP ...

Under the Adjustments section (A2) you need to enter the date you commenced residency. You will not be entitled to the full year tax free threshold (usually $6,000 tax free) but as far as I know you will get the low income rebate (or whatever part of it you're entitled to if your taxable income is over $30,000).

It's an interesting question and I'm not sure I've come across it before ... but I'm pretty confident that you'll get it.

The reduction in the tax free threshold will cost you 15% of $500 per month that you were not a resident. e.g. if you moved back to AUS on 1st Jan your tax free threshold will reduce from $6000 to $3000 (6 months @ $500 pm) and this will add $450 tax to your assessment ($3000 @ 15%).

Hope this helps.

:cheers:

[aratic]

Thanks for your reply Nick. Exactly what I wanted to know :goodjob:

Cheers