Last year Jim's gross weekly pay was $920 and he received $520 in bank interest. HIs taxation deductions totalled $1370.
a) Calculate Jim's gross income for last year.
b) How much was Jim's taxable income?
c) Jim's Medicare levy was 1.5% of his taxable income. HOw much was Jim's Medicare levy last year?
To solve these questions, we need to go step by step.
a) Calculate Jim's gross income for last year.
- Gross income is the sum of the weekly pay, bank interest, and taxation deductions.
- Jim's gross weekly pay is given as $920.
- Jim received $520 in bank interest.
- Jim's taxation deductions totaled $1370.
Therefore, Jim's gross income for last year is given by:
Gross income = Gross weekly pay + Bank interest + Taxation deductions
Gross income = $920 + $520 + $1370
To calculate the value, we add the three amounts together:
Gross income = $920 + $520 + $1370
Gross income = $2810.
b) How much was Jim's taxable income?
- Taxable income is the amount on which taxes are calculated after deductions.
- To find the taxable income, we need to subtract the taxation deductions from the gross income.
- Jim's taxation deductions were given as $1370.
- We calculated Jim's gross income in part (a) as $2810.
Therefore, Jim's taxable income is given by:
Taxable income = Gross income - Taxation deductions
Taxable income = $2810 - $1370
To calculate the value, we subtract the deductions from the gross income:
Taxable income = $2810 - $1370
Taxable income = $1440.
c) Jim's Medicare levy was 1.5% of his taxable income.
- The Medicare levy is a percentage of the taxable income.
- Jim's taxable income was calculated in part (b) as $1440.
- Jim's Medicare levy is 1.5% of his taxable income.
Therefore, Jim's Medicare levy last year is given by:
Medicare levy = 1.5% of Taxable income
To calculate the value, we need to multiply the taxable income by 1.5% (or 0.015):
Medicare levy = 0.015 * Taxable income
Medicare levy = 0.015 * $1440
To calculate the value, we multiply 0.015 by $1440:
Medicare levy = $21.60.
Therefore, Jim's Medicare levy last year was $21.60.