Question

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

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  

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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

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