Tax Returns Explained Simply

Watch this video to find out how it all works in your tax return refund or payable.

See tax rates below

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 returns explained

Tax rates 2015–16

The following rates for 2015–16 apply from 1 July 2015.

 Taxable income  Tax on this income
 0 - $18,200  Nil
 $18,201 - $37,000  19c for each $1 over $18,200
 $37,001 - $80,000  $3,572 plus 32.5c for each $1 over $37,000
 $80,001 - $180,000  $17,547 plus 37c for each $1 over $80,000
 $180,001 and over  $54,547 plus 45c for each $1 over $180,000

The above rates do not include the:

  • Medicare levy of 2%
  • Temporary Budget Repair Levy; this levy is payable at a rate of 2% for taxable incomes over $180,000.

Personal Tax Rates 2014-15

** (including the Temporary Budget Repair Levy)

 Taxable income  Tax on this income
 0 – $18,200  Nil
 $18,201 - $37,000  19c for each $1 over $18,200
 $37,001 - $80,000  $3,572 plus 32.5c for each $1 over $37,000
 $80,001 - $180,000  $17,547 plus 37c for each $1 over $80,000
 **$180,001 and over  $54,547 plus 47c ** for each $1 over $180,000

*The above table does not include Medicare Levy or the effect of any Low Income Tax Offset (“LITO”).

Medicare Levy is applied on a progressive basis at the additional rate of 2.0% plus the Medicare Levy Surcharge if eligible private health insurance cover is not maintained. There are low income and other full or partial Medicare exemptions available.

The Low Income Tax Offset (“LITO”) full amount is $445 reducing by 1.5 cents in the dollar, for every dollar of taxable income over $37,000 such that it cuts out at $66,667. The effect is that no tax is payable up to an income of $20,542.

Tax rates 2013-2014

The following rates for 2013-2014 apply from 1 July 2013.

 Taxable income  Tax on this income
 0 - $18,200  Nil
 $18,201 - $37,000  19c for each $1 over $18,200
 $37,001 - $80,000  $3,572 plus 32.5c for each $1 over $37,000
 $80,001 - $180,000  $17,547 plus 37c for each $1 over $80,000
 $180,001 and over  $54,547 plus 45c for each $1 over $180,000

The above rates do not include the Medicare levy of 1.5%.

Tax rates 2012-13

The following rates for 2012-13 apply from 1 July 2012.

 Taxable income  Tax on this income
 0 - $18,200  Nil
 $18,201 - $37,000  19c for each $1 over $18,200
 $37,001 - $80,000  $3,572 plus 32.5c for each $1 over $37,000
 $80,001 - $180,000  $17,547 plus 37c for each $1 over $80,000
 $180,001 and over  $54,547 plus 45c for each $1 over $180,000

The above rates do not include the Medicare levy of 1.5%

Tax rates 2011-12

The following rates for 2011-12 apply from 1 July 2011.

 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

The above rates do not include the Medicare levy of 1.5%
The above rates do not include the Flood levy

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

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Tax return explained simply by an online tax agent

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explanation of tax returns by tax agent Tax Accounting Adelaide

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