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Income
tax is levied on taxable income. Taxable income is calculated as [assessable
income] less [any allowable deductions]. Deductions include wages, cost of stock,
rent, bad debts, and previous year losses.
Sole
traders are not required to complete a separate return for their business. They
use their personal income tax return to report their business income and
deductions. Partnerships complete a partnership tax
return to show the partnership's income and deductions and how the profit or
loss was shared among partners. Companies complete a company tax
return to calculate the income tax the company should pay. Income tax is
calculated according to taxable income for sole traders.
Resident Tax Rates 2008-09
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Taxable Income
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Tax on this income
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$0 - $6,000
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$0
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$6,001 - $34,000
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15c for each $1 over $6,000
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$34,001 - $80,000
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$4,200 plus 30c for each $1 over $34,000
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$80,001 - $180,000
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$18,000 plus 40c for each $1 over $80,000
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Over $180,000
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$58,100 plus 45c for each $1 over $180,000
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NOTE:
Resident tax rates do not include the Medicare levy of 1.5%.
FURTHER
INFORMATION:- Refer to the Medicare
levy section of the ATO website for more information .
Non-Resident Tax Rates 2008-09
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Taxable Income
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Tax on this income
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$0 - $34,000
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29c for each $1
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$34,001 - $80,000
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$9,860 plus 30c for each $1 over $34,000
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$80,001 - $180,000
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$23,660 plus 40c for each $1 over $80,000
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Over $180,000
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$68,660 plus 45c for each $1 over $180,000
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NOTE: Nonresidents are not required to pay the Medicare levy.
MORE: For more information on sole trader income tax, refer to the TaxPack section of the
ATO website.
Partnership
A partnership running a business must complete a partnership tax return
to show all income earned and deductions claimed for expenses during the course
of the business. Each partner pays tax on their share of the partnership's
income. Consequently they must include their individual share of the net
partnership profit or loss in their personal tax return. Partnership
and trust 2008 tax returns instructions are available on
the ATO website.
Company
A company is a
distinct legal entity with its own income tax liability therefore
a company tax return must be completed for each company. A company's
income tax is calculated as a percentage of the taxable income the company
earned during the financial year. The company tax rate is 30%.
FURTHER INFORMATION: Company 2008 tax return
instructions are available on the ATO website.
| IMPORTANT DISCLAIMER: This article is published as a guide to clients and for their private information. This article does not constitute advice. Clients should not act solely on the basis of the material contained in this article. Items herein are general comments only and do not convey advice per se. Also changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of these areas. |
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