Income tax is payable by individuals, companies and various other types of entities. We assist many individuals in the lodgment of their tax returns and, especially for persons who have investments and receive income from a diverse range of sources, seeking the expertise of a Sydney Tax Accountant or Sydney accountant can be the difference between hundreds or thousands of dollars of savings in tax. For companies, seeking advice from a Tax Accountant is crucial.
In relation to income tax returns, there are two fundamental formulae to keep in mind. The first allows you to determine your taxable income for any given year:
Taxable Income = Total Assessable Income – Total Deductions
Your “assessable income” can include (but is not limited to) things like your salary, interest earned on savings and profit from investment properties. “Deductions” might include (but is not limited to) things like expenses incurred in the course of your employment and losses and expenses involved with maintaining an investment property. Most important to tax payers, the law accommodates for a whole range of tax deductions. An accountant can help you identify whether any of your expenses can be properly categorized as a tax deduction and therefore reduce your taxable income.
The second formula allows you to determine how much income tax you will be liable for in any given year:
Income Tax = (Taxable Income x Rate) - Tax Offsets
“Rate” refers to the marginal tax rate which, for Australian individual residents in the 2016-2017 financial year is:
|
Taxable income |
Tax on this income |
|
0 – $18,200 |
Nil |
|
$18,201 – $37,000 |
19c for each $1 over $18,200 |
|
$37,001 – $80,000 |
$3,572 plus 32.5c for each $1 over $37,000 |
|
$80,001 - $180,000 |
$17,547 plus 37c for each $1 over $80,000 |
|
$180,001 and over |
$54,547 plus 45c for each $1 over $180,000 |
Note that the above rates do not include the Medicare levy and Temporary Budget Repair levy.
It is also important to note that different concessions and exemptions can apply.
This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Tax or Accounting Advice. It does not take into account your objectives, financial situation or needs or your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.
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