Adam and Sarah are married and have two children. They recently purchased private health cover. Sarah is
Question:
Adam and Sarah are married and have two children. They recently purchased private health cover. Sarah is a homemaker and Adam works in a telecommunication company. Adam receives annual remuneration of $98,000 and $12,286 per annum in allowable deductions. He has $100,000 worth of shares of a large company, producing a 3% annual dividend yield (fully franked). He is concerned about saving for retirement and has decided to salary sacrifice $10,000 annually to superannuation.
Considering all the Medicare levies and offsets, answer the following questions.
Required:
How much is the total tax payable before salary sacrifice arrangement?
How much is the total tax payable after salary sacrifice arrangement?
Is it worthwhile for Adam to salary sacrifice $10,000? Explain.
Given the availability of the age pension, why does Adam need to save through his superannuation fund for retirement?
Concepts in Federal Taxation
ISBN: 9780324379556
19th Edition
Authors: Kevin E. Murphy, Mark Higgins, Tonya K. Flesher