This is outlined in Division 4 of the 1997 Income Tax Assessment Act.

There are 4 basic steps:

1.    Calculate your taxable income.

2.    Calculate your basic income tax liability using income tax rates.

3.    Calculate and apply any tax offsets relevant to you.

4.    Subtract the offset (step 3) from the income tax liability calculate in (step 2).

The first step per the Method Statement above is to calculate your taxable income.  Your taxable income is calculated by adding up all your assessable income and subtracting your allowable deductions.

If you would like to discuss further please contact us:
McNamara and Co - Chartered Accountants, located minutes from the Melbourne CBD
www.mcnamaraandcompany.com.au/contact-us
Phone +61 3 9428 1062
Email admin@mcnamaraandco.com

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