Hello everyone,
Sorry but I'm just not sure if my calculations are right. and wondering if somebody could please help.
I have just settled on my first IP and with the first Interest only payment due at the end of the month I'm trying to work out a rough figure with the shortfall I'll be required to service the loan. But I get confused when I minus the Tax deduction on Interest payments. I was planning on using the tax variation form so each pay fortnightly.
My marginal rate is 30% (about 60K pa)
Do I minus the 30% from the annual Interest Only payments which are about $ 24,600
or do I minus the 30% after I have taken the the yearly rental income from the Interest payments?
e.g $24,500 – $13,000 = $ 11500
Because on both calculations I get different rough shortfalls after the deduction?
I can't seem to work out an approx shortfall, here are the basics if somebody could help, thanks
Loan repayments: Interest Only $ 2050 per month / $ approx $ 24500 p.a
Rental Income: $ 250 p/w / $13,000 p.a or $ 1010 per month after agent fees deducted.Tax rate 30% (60K p.a income)
Thanks.
You will have to work out your taxable income after taking into account the rent and all expenses of the property, including depreciaton. Once you have found this, then look at the calculator on the ATO site to determine your new tax amount and minus this from the old tax payable and that is your tax savings.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
So that would make your net income around: $60k+$12.12k-$24.5=$47.62k before tax
Thanks guys, I'm still confused, might have to go see the tax man!
1 – Add all incomes
2 – Add all tax deductible costsIncome – costs – depreciation (if any) = New Income
New Income x Tax Rate = New Tax Payable
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