Tax Calculation - could a tax accountant run through my numbers

JimB on 24/06/2015 - 16:19
Last edited 24/06/2015 - 16:20

Hi, can a kind accountant run through my numbers (just in case I missed something or messed it up)

My parents receive income (distributions) via a family trust. They are under age 65 and have no other sources of income.

I'm wondering how much concessional super contributions to make on their behalf to minimise their overall amount of tax payable (both income tax and super tax).

They don't have any deductions other than the standard $300.

Are my numbers correct?

Say each of their taxable income is $35,000 in 2014/2015.

They claim the following deductions:
$300 - work related- no receipts required.
$15,150 concessional super contributions (and pay 15% tax).

Net taxable income $19,550 after allowable deductions.
$257 Tax on income
$192 Medicare levy

$449 Tax + Medicare levy
less
$445 LITO

$4 income tax payable

Correct? I don't want them to pay more income tax or super contributions tax than necessary.

Financial

Comments

  • denuto on 24/06/2015 - 17:54

    or any avoidable accountancy fees?

    • JimB on 24/06/2015 - 20:14

      No accountancy fees

  • retiredfeline on 24/06/2015 - 18:02

    IIRC, keep the first 18200, and sacrifice the rest to super as that's taxed at 15% rather than 21% (including Medicare levy).

    • JimB on 24/06/2015 - 20:15

      Your tax free threshold is greater than $18,200 due to the low income tax offset.

      • cpho on 24/06/2015 - 20:31
        +1

        Yeah, $20542 is the number you're looking for. Pretty much no tax payable if that's your taxable income.

        • JimB on 24/06/2015 - 22:59

          That number looks familar for a single person, but I was looking for 'the number' for a member of a couple where each couples income was identical (and under age 65).

  • cpho on 24/06/2015 - 20:55

    Your calculations look pretty solid.
    Do they have to travel for work? Maybe you could claim some car expenses. ATO Link

    • JimB on 24/06/2015 - 22:56

      Thanks,

      Naah no car expenses or other expenses would exceed $300 anyway, so just claiming the std $300.

  • megamilinda on 24/06/2015 - 22:15

    You say their only income is from a family trust but you are also claiming work related expenses? Do they work as well? There are rules with claiming personal super contributions & working, you need to clarify the situation.

    • megamilinda on 24/06/2015 - 22:22

      Also, you do not have to pay Medicare Levy if your taxable income is below $20,896.

      • JimB on 24/06/2015 - 22:53

        They aren't working, but I thought you'd can claim $300 without any receipts, I.e. booking keeping, accountant fees.

        Medicare levy is different if you're single or a family. It's about $35k for a family before you pay medicare levy.

        • SydneySwan on 25/06/2015 - 09:55
          +1

          Book keeping, accountant fees are not work expenses. If you claim work expenses but have no work this will raise a red flag.

        • megamilinda on 25/06/2015 - 12:00
          +1

          The $300 is only for work related expenses, not cost of managing tax affairs, you need receipts for anything that is not work related.

          As for Medicare, it's either the per person or the family thresholds, which ever gives you the better result. So for example Mr earns $32K Mrs earns $0, Mr exempt because family under the threshold. Or if Mr earns $20K and Mrs earns $20K, both exempt as individually under the threshold.

          As for your calc:
          $35,000
          -$14,457 personal super contribution (15% tax - make sure you get a letter from the super fund)
          = $20,542
          Tax = 445
          No medicare
          LITO $445
          $0 tax payable on individual tax return

          That's for a distribution of exactly $35,000 though, adjust accordingly

        • JimB on 25/06/2015 - 12:36

          @SydneySwan:

          Thanks, wasn't 100% sure.

        • JimB on 25/06/2015 - 12:43
          +1

          @megamilinda:

          I never knew you that you could either the single or family test that gives you the best result!…Thanks very much.

          I wont claim the $300 deduction work related expense.

          I'll aim to have their taxable income as close as $20,542. Better make the concessional super contributions today.

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