Watch this video to find out how it all works in your tax return refund or payable.
A simple tax return is really not that simple.
But let me dumb it down so if you have never really understood it, you soon will.
You start with Incomes (like wages and salaries) less deductions (like uniforms and cost of tax preparation fee) which give you what the tax office calls TAXABLE INCOME
Once you have your taxable income , depending on how high it is, you are taxed progressively more as in this table of the Income tax rates. This is called Tax on your Taxable Income.
Tax rates 2010–11
| Taxable income | Tax on this income |
| 0 – $6,000 | Nil |
| $6,001 – $37,000 | 15c for each $1 over $6,000 |
| $37,001 – $80,000 | $4,650 plus 30c for each $1 over $37,000 |
| $80,001 – $180,000 | $17,550 plus 37c for each $1 over $80,000 |
| $180,001 and over | $54,550 plus 45c for each $1 over $180,000 |
Once you have tax on taxable income you add medicare levy
Then you take off any taxes paid (such as on wages) and any tax offsets (such as education tax refund)to get your tax return refund or amount payable. If you have already paid more tax than the tax on taxable income then you get a refund.
For more examples and explanations of Income, deductions, taxes paid and tax offsets visit www.ATO.gov.au or ask us
Here is your bonus PDF version
Tax return explained simply by an online tax agent
Here is your bonus Audio Version
explanation of tax returns by tax agent Tax Accounting Adelaide
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