In This Chapter
Understanding the tax formula
Identifying assessable income
Working out exempt income
Dissecting the general deduction provisions
Including possible tax offsets
I ncome tax law is like a doing a jigsaw puzzle: You need to figure out where all the bits and pieces fit together. The Australian tax system uses a tax formula to work out whether you’re liable to pay tax or get a tax refund. The tricky part is coming to terms with all the rules and regulations that you need to obey.
In this chapter, I guide you through the key components that make up the tax formula and explain the statutory regulations you need to follow.
Tax is levied on taxable income. At the end of each financial year (which commences on 1 July and ends on 30 June), Australian residents are required to disclose the taxable income they derive from all sources in and out of Australia. (Non-residents are required to disclose only ...