Income Tax | Summary and Q&A

TL;DR

This video explains how to calculate income tax based on taxable income in Australia using a tax table provided by the Australian tax office.

Key Insights

• ❓ Taxable income is calculated by considering actual income and deducting eligible expenses.
• 🚕 The Australian tax office provides a tax table to determine income tax based on taxable income.
• 🚕 The tax amount is determined using formulas specific to each income bracket.
• ✋ The tax scale is incremental, with higher tax rates for higher income brackets.
• 🥶 The first $6,000 of taxable income is tax-free for all individuals.
• 🏬 The tax department requires payment of an additional $80 for incomes above $43,655.
• 💐 Different deductions can be made to lower the taxable income.

Transcript

okay this is a video to work out the amount of income tax payable on a given taxable income now first off this table here is a table from the Australian tax office okay and what it basically does is for any given taxable income it allows you to work out the tax using a list of these little formulas down here now first off what is taxable income tax... Read More

Questions & Answers

Q: What is taxable income and how is it calculated?

Taxable income is the income after deducting eligible expenses from the actual income. These expenses can include wages, bank interest, rent on owned property, and certain deductions for specific professions.

Q: How can I determine the amount of income tax payable based on my taxable income?

Refer to the provided tax table from the Australian tax office. Locate the corresponding taxable income range and follow the instructions listed. Calculate the tax amount based on the given formula for each income bracket.

Q: Are there any income brackets where no tax is payable?

Yes, the first $6,000 of taxable income is tax-free for all individuals, regardless of their earnings. This applies even if someone earns $180,000.

Q: How does the tax rate increase with higher taxable incomes?

The tax scale is incremental. From $6,000 to $35,000, the tax rate is 15 cents in the dollar. From $35,000 to $80,000, it increases to 30 cents. The rates continue to increase for higher income brackets.

Summary & Key Takeaways

• Taxable income is calculated by considering actual income and deducting eligible expenses.

• The provided tax table helps determine the tax amount based on the taxable income.

• The tax scale is incremental, with different tax rates for different income brackets.