simple tax calculator

How will the tax calculator help you

We have all heard it before, there are two certainties in life – death and taxes. Tax. For me it conjures up negative images of resentment towards the government taking my hard earned money and “wasting” it. But, give the concept a little more thought and it becomes pretty clear that taxes are actually really important to sustaining our lives. The tax collected by the government provides for a host of operating functions such as infrastructure (transportation, communication, water, buildings and electricity), our health care and education system, our defensive system and the environment. Given this perspective, tax is a positive aspect but, we still need to be mindful so that we don’t pay unnecessarily. The field of tax is complex in its own right without having to add the additional parameters from personal situations and differing country standards and policies. Although our lives following similar paths these variances make it near impossible to generalise so what I have developed is a simple tax calculator to be used as a guide in your setup of other eFM models (eg. personal financial budget – income worksheet) and overall planning. I have catered for Australian and US residents in this version

An example

Australian Resident – assume today is 22 December 2015 and the financial year is 2015/16. You earn a gross (before tax) income of $85,000 (eg. not just wages) and you would like to estimate your expected tax paid at the end of June 2016. You are 25 and single and you lead a simple life with no investments or deductions you can think of. You have visited the ATO website and determined you are not exempt from the medicare levy. By entering these details you return an estimated tax to be paid on your taxable income of $21,097, leaving you an effective net income of $63,903




 

US Resident – assume the same situation with some slight variances 1) the end of financial year is 30 September 2) your filing status is Single and 3) the medicare levy isn’t applicable. The result is an estimated tax to be paid on your taxable income of $17,021.25, leaving an effective net income of $67,978.75

Simple Tax Calculator

How this calculator works

Depending on whether you recognise yourself as an Australian or US resident will depend on which inputs you will enter. By entering in factors such as income year, taxable income and deductions along with other variables such as Medicare Levy (Australia) and filing status (US) the model will determine your estimated tax and after-tax income. 

Limitations

This nature of these calculators are simple. The Australian Residents calculator doesn’t consider whether you are a Non Resident or allow for the Medicare Levy Surcharge, Temporary Budget Repair Levy, Higher Education Loan Program (HELP), Trade Support Loan (TSL) or Student Financial Supplement Scheme (SFSS) liabilities you may have.

Instructions

Walk-through:

Australian Residents

  1. Select the income year – in Australia this ends 30 June
  2. Enter your taxable income – this is your total income ie. all sources and not just wages
  3. Enter your deductions – there are numerous taxable deductions so be sure to consult with an accountant for specific details.
  4. Select whether or not you are exempt from the Medicare Levy – most residents are not exempt. There are special conditions that need to be met. Visit the ATO website to see if you qualify for the Medicare Levy Exemption.

US Residents

  1. Select your filing status – US residents are required to distinguish which category they fall into for tax purposes. There are varying tax tables so be sure to visit the IRS website for information on your filing status
  2. Select the income year – in the US this ends 30 September
  3. Enter your taxable income – this is your total income ie. all sources and not just wages
  4. Enter your deductions – there are numerous taxable deductions so be sure to consult with an accountant for specific details.

eFM do-it-yourself financial planning ebook – coming soon!

Please signup to the eFM subscriber list if you would like to download the eFM ebook. Coming soon, this ebook will provide you with the step by step process to do-it-yourself financial planning.

Australian Residents

All fields marked with * are mandatory
Select Income Year *
Enter Your Taxable Gross Income *
Input Value Without $
Enter Your Deductions *
Input Value Without $
Are you exempt from the Medical Levy *
Estimated tax on your taxable income
Estimated after tax income

US Residents

All fields marked with * are mandatory
Select your filing status *
Select Income Year *
Enter Your Taxable Gross Income *
Input Value Without $
Enter Your Deductions *
Input Value Without $
Estimated tax on your taxable income
Estimated after tax income

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