Received tax assessment- need clarification

G

greencl

Registered User
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Folks:
tution needed before i call tax office, we ( both husband and wife) are both earning and jointly assessed and are in higher bracket 41%. we received assessment for FY2007. i need clarfication. we are all PAYE workers and have some medical and dental and bin expenses.
the figures from assesment
total taxable income for both arrived as: 67446
so tax is calculated as follows by the officer
(a) 57038@20% =11407
(b) 10608@41%=4349.28

but in budget 2007, it was mentioned that Married Couple both spouses with Income43,000 @ 20% with increase of 25,000 max.
Balance @ 41%

so my argument is as our combined income 67446/- which is less than (43000 plus max increase of 25000) should we not be taxed whole lot at 20% but not some at 20% and some at 41%, i donot know how that proportion has arrived.

am i right? or am i missing anything.
need some insights before i challenge computerised assessment and the revenue officer who is more knowledgeable than me.

thanks
 
Hi,

Basically you can only claim the full 25000 increase in the standard rate band if the second spouse is earning a minimum of 25000. Based on the figures you posted it appears that the second spouse earned 14,038. The standard band can only be increased by the second spouses income to a maximum of 25000.

Hope that makes sense!

BaileyMc
 
its 43000 plus spouse income of up to 25000, where the spouse is earning less than 25k it is 43k plus spouses income. I'm guessing this is what has happened in this case giving the amount assessible at 20%. I hope this helps!
 
Thanks all, just figured out the calculations, you get surprised some evenings when you see suddenly in post and tax refund is less than expected. the bloke in revenue office did a correct job.

thanks again
 
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