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Tax offsets

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Tax Offsets or Rebates are not same as the tax deductions. It directly reduces the tax payable. Usually, offsets cannot get us refund on their own, but can reduce our tax payable to zero. The tax offset works in the following way:


In order to be granted for tax offset there are few situations, which may include:

  • Pensioner or Senior Australian tax offset;
  • Earn a low income tax offset;
  • A carer or dependent tax offset;
  • Medical expenses tax offset;
  • A private health insurance tax offset;
  • An Australian super income stream tax offset;
  • Super contributions on behalf of spouse tax offset;
  • Zone and overseas forces tax offset;
  • Beneficiary tax offset;
  • Refund of franking credits;
  • Tax rebate on education;
  • Payments or allowances received by the Government tax offset;
  • Entrepreneurs tax offset.

Tax offset is legal and as a result the Internal Revenue Service (IRS) can lawfully withheld our tax refund. There has to be valid reasons to challenge the tax offset, those challenges may include the following:

  • No owing debts, as they have been paid prior to the offset;
  • Making adequate payment according to the schedule of rehabilitation (entered with the lender);
  • An active bankruptcy;
  • Discharge of debt due to bankruptcy or discharge;
  • Disabled totally and permanently;
  • Not an enforceable debt.

Also following are the factors that we can follow to prevent tax offset:

  • Consolidation of loans into the direct loan program;
  • Rehabilitation of loans with present lender;
  • Full repayment of defaulted student loan.

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