Q1: To find Ted Jones's taxable income for 2016/17:
Assessable income: Salary + Car reimbursement + Other income = $92,000 + $3,400 + $2,000 = $97,400
Deductions: Car expenses + Interest paid + Donations = $3,200 + $750 + $250 = $4,200
Taxable income = Assessable income - Deductions = $97,400 - $4,200 = $93,200
Note: The employer-paid holiday is neither taxed nor exempt income, and entertainment expenses are not deductible.
Q2: To calculate his tax payable (including Medicare Levy):
Tax payable on Salary: $0 (up to $18,200) + ($37,000 - $18,200) * 19% + ($87,000 - $37,000) * 32.5% + ($93,200 - $87,000) * 37% = $22,116
Dependent Invalid Carer Tax Offset (DICTO): $2,335
Zone Rebate (Zone B): $599.20
Medical Expenses Rebate: $880.20
Medicare Levy (2% of taxable income): $1,864
Total Tax Payable = $22,116 - $2,335 - $599.20 - $880.20 + $1,864 = $20,165.60
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