income splitting
- Thread starter tonyd
- Start date
Second question first...
The tax rates are (from http://www.ato.gov.au/content.asp?doc=/content/individuals/12333.htm ):
$0 – $6,000
Nil
$6,001 – $20,000
17c for each $1 over $6,000
$20,001 - $50,000
$2,380 plus 30c for each $1 over $20,000
$50,001 – $60,000
$11,380 plus 42c for each $1 over $50,000
Over $60,000
$15,580 plus 47c for each $1 over $60,000
So an income of $40,000 incurs tax of $2,380 plus $20,000 * .30 = $8,380 (two of these = $16,760- so net income after tax is $63,240)
An income of $80,000 incurs tax of $15,580 plus $20,000 * .47 = $24,980 (Net income after tax = $55,020).
(Medicare, deductions etc will make a difference- but the big picture is there).
So two incomes of $40K incur more that $7,000 less tax than a single income of $80,000.
Which might help to answer the first question.
The tax rates are (from http://www.ato.gov.au/content.asp?doc=/content/individuals/12333.htm ):
$0 – $6,000
Nil
$6,001 – $20,000
17c for each $1 over $6,000
$20,001 - $50,000
$2,380 plus 30c for each $1 over $20,000
$50,001 – $60,000
$11,380 plus 42c for each $1 over $50,000
Over $60,000
$15,580 plus 47c for each $1 over $60,000
So an income of $40,000 incurs tax of $2,380 plus $20,000 * .30 = $8,380 (two of these = $16,760- so net income after tax is $63,240)
An income of $80,000 incurs tax of $15,580 plus $20,000 * .47 = $24,980 (Net income after tax = $55,020).
(Medicare, deductions etc will make a difference- but the big picture is there).
So two incomes of $40K incur more that $7,000 less tax than a single income of $80,000.
Which might help to answer the first question.
