Question:
1. Can you please explain how the lump sum tax offset calculated?
2. Why has it not allowed the full amount? I believe that the client is in the 45% marginal tax rate for sources of income without any offset so I can’t see any reason for reducing the full entitlement?
Answer:
1. Lump sum tax offset is Tax on taxable income less tax on income rather than Lump sum A less tax on Lump sum A.
The offset is the difference between the marginal rate on the income and 30%
Ref: https://www.ato.gov.au/rates/key-superannuation-rates-and-thresholds/?anchor=Superlumpsumtaxtable
2. Calculation of Lump sum tax offset is rather complex. If user thinks that something is incorrect he can lodge the return and wait for the NoA (about 1-2 weeks after lodgment) with correct amount.
Also I should notice that different tax rates are applied to parts of income below and above ETP cap -
The refund value in LodgeiT is calculated by an algorithm we build. If the ATO estimate is different, we will need to investigate.
Please help us further check this, kindly supply the following:
Proof which should consist of a set of calculations
Form Copy / download
Form URL's
Sample - https://go.lodgeit.net.au/organisations/724446/tax/forms/4174664/Estimate
Reference of relevant legislative / ATO website sources describing the formula/algorithm.