A deduction reduces your taxable income, whereas a tax offset (sometimes referred to as a rebate) directly reduces the amount of tax payable on your income.

For example, tax payable on an income of $110k is $30,297. If you have a deduction of $1k, your taxable income would be $109k with a tax payable amount of $29,912 (i.e. a saving of $385). A $1k offset, however, reduces the amount of tax payable by the full $1k.  A much better proposition.


Adjusted Taxable Income

ADJUSTED TAXABLE INCOME A question that we are quite often asked, is "What is the adjusted taxable income line in my tax return?"  Your adjusted taxable income (ATI) is the sum of taxable income, adjusted fringe benefits, tax-free pensions or benefits, target foreign...

PAYG Instalments

PAYG INSTALMENTS When you have a substantial tax payable amount during a tax year, in order to pre-empt your tax payable the following year, the ATO places you in the PAYG Instalment system.  This means that you pay an amount to the ATO each quarter, to ensure that...

ATO Data Matching

ATO DATA MATCHING The ATO uses data matching to determine whether or not an audit is required.  Data matching compares data from different sources against lodged tax returns.  If there is a discrepancy, the ATO may escalate the tax return for further investigation....