Wednesday, October 07, 2009

Moom's Tax Assessment

I didn't get as much of a tax refund as I was expecting for two reasons:

1. You can only claim the low income tax offset to the extent that tax is payable on your income in the first place. The offset can be as much as $A1,200 but if tax payable is, say, $A573.75 as in my case then that is as much as you can claim.

2. Foreign tax credits can only be claimed if after the low income tax offset you have some tax liability. Mine was zero and so I couldn't claim $A251 in foreign tax paid.

But I could claim $A1,606.68 in franking credits on Australian dividends and I'd already paid $A3,706 in tax and so my refund was $A5,312.68.

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