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      Taxable Income, Tax Refundable and Payable Calculation (Case 2)

      Calculation process

      Scenario:

      The details of my receipts and expenditure (2016/17) are as following: 
      Receipts: 
      • Salary $92,000 
      • Car reimbursed $3,400 
      • Entertainment allowance $2,000
      • Employer-paid holiday $5,000 
      Expenses: 
      • Work-related car expenses $3,200 
      • Entertainment expenses$1,000 
      • Interest paid on bank loan (buy shares in a listed company) $750 
      • Donation$250 
      • Dental expenses (self and wife) $1,800 
      • Medical expenses for his disabled son $6,700 
      Dependents’ details: 
      • My wife, Mary, 41 years old, received interest income $880, she's a housewife. 
      • My disabled son Paul, 20 years old, full-time students, in receipt of a disability support pension $1,450 
      • In Addition, I maintained private patient hospital insurance, no family tax benefits 2016/17, resides in Ordinary Zone B. 
      Could you show me how to calculate my taxable income 2016/17 and my tax refundable/payable (including Medicare Levy)?
       
      Calculation Process:
      (All legislation references are to ITAA97 unless otherwise stated)

      Taxable income= assessable income- deductions
      • Assessable income= Salary +Car reimbursement+ Entertainment allowance
      • =$92,000+$3,400+$2,000=$97,400
      • Deductions= Car expenses (s8-1; 28-25) +Interest (s 8-1) + Donations (s30-15)
      • =$3,200+$750+$250=$4,200
      So, Taxable income= $97,400-$4,200=$93,200
      (under ITAA36 s 23L，the employer paid holiday is neither assessable nor exempt income; under ITAA97 s 32-5, entertainment expenses are not deductible)


      At 2016/17 salary rate,
      • Tax payable on Salary= $0(under $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)
      • DICTO (s 61-10) = $2627-【1/4*（$1,450-$282）】=$2,335

      Zone Rebate


      Relevant rebate amount = maximum DICTO available + notional dependent rebate (one student) ==$2,335+$376=$2,711
      Ordinary Zone B rebate=$57+($2,711*20%) =$599.2
      Medical expenses rebate (s 159P (4))
      Medical expenses rebate= [(eligible medical expenses- medical refunds) - $2,299] *20%
      = ($6,700-0-$2,299) *20%=$880.20
      Medicare Levy (2%* taxable income 2016/17) = 2%*$93,200= $1,864
      (Avoid Medicare levy surcharge because of private health insurance)

      So, your taxable payable =$22,116-$2,335-$599.20-$880.2+$1,864=$20,165.6