Question

Australian taxation law

Question 2 10 Marks
Calculate the Medicare levy and Medicare levy surcharge payable for the year ended 30 June 2017 for the following taxpayers:
(a) An Australian resident, aged 28 years, with a taxable income of $21,335.
(b) ) An Australian resident, eligible for a Seniors tax offset, with a taxable income of $31,738.
(c) An Australian resident, aged 43 years, with a taxable income of $55,000.
(d) A taxpayer who is not a resident for tax purposes, with a taxable income of $185,000.
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(e) An Australian company with a taxable income of $2m.
(f) An Australian resident, aged 45 years, with a taxable income of $123,800, holding private health insurance for the year.
(g) An Australian resident, aged 45 years, with a taxable income of $120,000, and no private health insurance.
(h) An Australian resident with a taxable income of $160,000, holding private health insurance for 90 days of the income year.
(i) Victor and his wife are Australian residents. Victor has a taxable income of $105,000 and his wife Jackie a taxable income of $85,000. They have no children and no private health insurance.
(j) An Australian couple have four children and no private hospital health insurance. What would be the family’s minimum Medicare levy surcharge threshold?

Answer 1

Answer a)	An Australian resident, aged 28 years, with a taxable income of $21,335
	Medicare Levy	Medicare levy surcharge
	In 2016–17 no need to pay the Medicare levy if taxable income is equal to or less than $21,655. Therefore Medicare levy here is ZERO	Medicare levy surcharge thresshold for the single is $ 90,000 or less is ZERO.
Answer b)	An Australian resident, eligible for a Seniors tax offset is not required to pay income tax as per Australian tax law.
	Medicare Levy	Medicare levy surcharge
	in 2016–17 no need to pay the Medicare levy if taxable income is equal to or less than $34,244 for seniors tax offset. Therefore Medicare levy here is ZERO	Medicare levy surcharge thresshold for the single is $ 90,000 or less is ZERO.
Answer c)	An Australian resident, aged 43 years, with a taxable income of $55,000.
	Medicare Levy	Medicare levy surcharge
	In 2016–17 The medicare levy for the income level above $ 21,665 is 2%. Therefore Medicare levy here is $ 40,000 ($2,000,000*2%)
Answer d)	A taxpayer who is not a resident for tax purposes, with a taxable income of $185,000.
	Medicare Levy	Medicare levy surcharge
	Non residents are exempted	Non residents are exempted
Answer e)	An Australian company with a taxable income of $2m.
	Medicare Levy	Medicare levy surcharge
	In 2016–17 The medicare levy for the income level above $ 21,665 is 2%. Therefore Medicare levy here is $ 1,100 ($55,000*2%)
Answer f)	An Australian resident, aged 45 years, with a taxable income of $123,800, holding private health insurance for the year.
	Medicare Levy	Medicare levy surcharge
	Since this person holding private health insurance cover, s/he is exempted from medicare levy	338.00
Answer g)	An Australian resident, aged 45 years, with a taxable income of $120,000, and no private health insurance.
	Medicare Levy	Medicare levy surcharge
	In 2016–17 The medicare levy for the income level above $ 21,665 is 2%. Therefore Medicare levy here is $ 2400 ($120000*2%)	300.00
Answer h	An Australian resident with a taxable income of $160,000, holding private health insurance for 90 days of the income year.
	Medicare Levy	Medicare levy surcharge
	In 2016–17 The medicare levy for the income level above $ 21,665 is 2%. Therefore Medicare levy here is $ 2410 ($160000*2%) for 90 days full exemption	700.00
Answer i	Victor and his wife are Australian residents. Victor has a taxable income of $105,000 and his wife Jackie a taxable income of $85,000. They have no children and no private health insurance.
	Medicare Levy	Medicare levy surcharge
	In 2016–17 The medicare levy for the income level above $ 21,665 is 2%. Therefore Medicare levy here is $ 3800 ($190000*2%)	100.00
Answer j	An Australian couple have four children and no private hospital health insurance. What would be the family’s minimum Medicare levy surcharge threshold?
	Medicare Levy	Medicare levy surcharge
	Income Level not provided. Therefore the charge cant be determined	Income Level not provided. Therefore the charge cant be determined
	Medicare levy surcharge Table
		Base tier	Tier 1	Tier 2	Tier 3
	Single threshold	$90,000 or less	$90,001 – $105,000	$105,001 –$140,000	$140,001 or more
	Family threshold	$180,000 or less	$180,001 – $210,000	$210,001 – $280,000	$280,001 or more
	Medicare levy surcharge	0%	1%	1.25%	1.50%