Income tax question

Discussion in 'Accounting & Tax' started by Lacrim, 19th Feb, 2021.

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  1. Lacrim

    Lacrim Well-Known Member

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    Have a quick question for you tax boffins out there:

    Say in the FY, I receive:

    • $60,000 in rents (AFTER expenses) ie net rent pre tax
    • $60,000 in 100% franked dividends from LICs (grossed up $86,000, net - $60,000)
    • no other income
    How much would I be left with in the hand after tax?

    Thanks
     
  2. Scott No Mates

    Scott No Mates Well-Known Member

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    Less than you want. :oops:

    ATO rates
     
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  3. SatayKing

    SatayKing Well-Known Member

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    Potential for a tax refund as a consequence of the franking.
     
  4. Lacrim

    Lacrim Well-Known Member

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    Yeah that's the bit I wasn't sure of ie what is the impact of the franking/div imputation on the residual rental income and how its taxed?
     
  5. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Taxable income will be $60,000 + (60,000+25714) = $145,714
    Tax payable after franking is $16,181.46 incl medicare. Note this doesnt consider private health or MLS or HELP debt impacts etc

    Note that the franking is to 30% and the franking would be $25714 not $26,000. but since your marginal tax rate is 39% each $ of franked income is a shortfall of 9cents.
     
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  6. SatayKing

    SatayKing Well-Known Member

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    Those who know have kindly posted. Medicare would be approx $2,900 based on your numbers.
     
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  7. Lacrim

    Lacrim Well-Known Member

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    Thank you!

    So net in the hand would be circa $103K.
     
  8. SatayKing

    SatayKing Well-Known Member

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    Fool around by placing some numbers into this. Don't rely on it as there is no certainty it is accurate but it should give you an indication and I stress only that.

    pay calculator
     
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  9. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Hmmm in the long run perhaps. Initially the $120K (or more if non-cash deductions like depreciation are considered) cash is received and tax is deferred until up to approx 10 months after the end of the tax year if using a tax agent. Thats year one. In year two instalments of tax will be payable to bring the tax shortfall forward. The gross income can be reinvested and could in theory compound benefit or be parked in a offset until used to pay the tax.
     
  10. Lacrim

    Lacrim Well-Known Member

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    Well its always an evolving thing but for planning purposes, I can accept $103K as the number.