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Foreign Tax Offset Limit

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Newbie

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Foreign Income Tax Offset

I lived in the US for 11 months and earned a salary over there. I have claimed a foreign income tax offset, but wanted to check that I had gotten the steps right. I used the material on your website, but found it a little technical. Grateful if you could confirm these are the basic steps: 

  1. Translate foreign income into AUD and add to domestic income. 
  2. Translate foreign tax paid into AUD. 
  3. Calculate (e.g. using the simple tax calc on the ATO website) what your Australian tax payable would be on your total income in AUD (including both foreign and domestic income). 
  4. Offset amount should be the Australian tax that would have been payable on the total sum of income, minus the tax that would be payable on Australian income if I had not earned any money overseas. 

Thank you for your guidance.

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ATO Certified

Community Support

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Hello @georgiaeflynn,

 

That looks to be correct, Have a look through Calculating and claiming your foreign income tax offset. There is a really good example with a step by step guide on how to work it all out.

 

Luke S

1 REPLY 1
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Best answer

ATO Certified

Community Support

Replies 0

Hello @georgiaeflynn,

 

That looks to be correct, Have a look through Calculating and claiming your foreign income tax offset. There is a really good example with a step by step guide on how to work it all out.

 

Luke S