Question

During the 2017/18 tax year, Selina Matterson (a single resident taxpayer, aged 41) has the following receipts:

• Net salary (after $18,000 PAYG tax withheld) $55,000
• Fully franked dividend from PPP Ltd $9,800 (with franking credit $4,200)
• Unfranked dividend from QQQ Ltd $900
• Net interest received $954 (after $846 no TFN tax withheld)
• Selina had no deductions
• She was covered by private hospital insurance

Required:

Calculate Selina’s taxable income for the 2017/18 tax year.

Calculate Selina’s net tax payable/refundable (including Medicare Levy) for the 2017/18 tax year.

Notes : We should only include the  Gross interest (rather than net interest) in part a  

Show your working

Answer 1

CALCULATION OF TAXABLE INCOMEOF SELINA:

NET SALARY - $55000

FULLY FRANKED DIVIDEND INCLUDING CREDITS- $14000

UNFRANKED DIVIDEND- $900

GROSS INTEREST- $1800

TOTAL- $71700

DEDUCTIONS NIL

TAXABLE INCOME - $71700

Your taxable income:	$71,700
Income tax payable:	$14,849
Medicare levy payable:	$1,434
Your income after tax & Medicare levy:	$55,417
Your marginal tax rate:	32.5%

This means for an annual income of $71,700 you pay:

No tax on income between $1 - $18,200	$0
19c for every dollar between $18,201 - $37,000	$3,572
32.5c for every dollar between $37,001 - $87,000	$11,277
Income tax payable	$14,849

INCOME TAX PAYABLE /REFUNDALE OF SELINA FOR YEAR2017/2018:

INCOME TAX PAYABLE- $14849

Less: PAYG TAX WITHHELD $18000

NET TAX REFUNDABLE $3151