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Claim Tax-Free Threshold in Australia: A Guide for Inner West Sydney Residents

Are you navigating the complexities of working with both a TFN (Tax File Number) and ABN (Australian Business Number) in Inner West Sydney? Wondering about how to claim tax-free threshold and how it impacts your earnings? Look no further! Endurego Tax Accounting Services is here to break it down for you.

Understanding How to Claim Tax-Free Threshold

First things first, let’s demystify the TFA. Whether you’re on an ABN or a TFN, you’re entitled to earn up to $18,200 tax-free in a financial year. Yes, you read it right – tax-free! There is a catch, you need to be a tax resident else every dollar will be subject to 32.5% tax rate or more.

Now, let’s delve into a real-life scenario to illustrate how the TFA works in Australia.

Meet Michael: Navigating Both ABN and TFN

Imagine Michael, a hardworking individual juggling both an ABN and TFN in Inner West Sydney. Having spent the entire tax year in Australia, Michael is entitled to the full TFA.

Here’s a snapshot of Michael’s earnings:

  • ABN: $15,000
  • TFN: $15,000 (Net Income) with Tax Withheld of $5,000

With a combined income of $30,000, Michael has already paid $5,000 in tax under the TFN. However, considering the TFA, his taxable income is $11,800 (Total of $30,000 – TFA $18,200).

Calculating Tax Liability and Refund

According to the ATO tax tables, Michael will be liable for 19% tax on the $11,800, resulting in a tax liability of $2,242.

Since he’s already paid $5,000 in tax under his TFN employment, Michael has overpaid taxes. As a result, he’s eligible for a refund of $2,758 ($5,000 – $2,242).

Unraveling Tax Considerations for ABN and TFN

In cases where income is higher, there may be a tax liability. However, it’s crucial to highlight that tax paid via TFN work is considered when assessing your ABN income and associated tax liability.

Moreover, individuals can leverage work-related expenses such as courses, protective gear, tools, etc., to reduce any potential tax liability.

Tailored Tax Guidance for Inner West Sydney

At Endurego Tax Accounting Services, we understand the unique challenges Inner West Sydney residents face. Our expert team is here to provide personalized guidance on claiming the tax-free threshold and optimizing your tax situation.

Conclusion: Navigate Taxation with Confidence

In conclusion, claiming the tax-free threshold in Australia involves understanding your entitlements, assessing your combined income, and optimizing your tax position. Endurego Tax Accounting Services is your trusted partner in navigating the intricacies of tax management in Inner West Sydney.

Unlock Your Tax Benefits Today!

Ready to make the most of the tax-free threshold? Contact Endurego Tax Accounting Services for tailored assistance and ensure you’re maximizing your earnings while staying compliant with Australian tax regulations.