Why did LodgeiT add an amount to taxable income for Item 12D even though the ATO pre-fill amount is less than $1,000?
This behaviour is related to the Employee Share Scheme (ESS) reduction rules and the $180,000 income threshold.
Even if the amount pre-filled by the ATO at Item 12D is less than $1,000, LodgeiT may still add an adjustment amount to taxable income when the taxpayer’s adjusted income exceeds the threshold.
Example Calculation
Wife
Taxable income: $155,509
Reportable Fringe Benefits: $35,173
Total adjusted income: $190,682
Since the adjusted income exceeds the $180,000 threshold, the ESS adjustment applies.
Husband
Taxable income: $176,973
Total adjusted income: $176,973
Learn more from the ATO- https://www.ato.gov.au/individuals-and-families/your-tax-return/instructions-to-complete-your-tax-return/paper-tax-return-instructions/2020/tax-return/income-questions-1-12/12-employee-share-schemes-2020