The Tax Questions Blog

Posts Tagged ‘rates’

Question: Can some kind soul please tell me how much Tax I will have to pay?

Next October (2009) I will be retiring at age 65. My wife, aged 64 has paid no Ni contributions and so will get no pensions.
My state and 1 private pension will bring in £15,500 per annum.

Now it gets tricky.
Due to an inheritence, I have about £400K in fixed rate bonds currently at 6% gross and producing £24K in interest, currently taxed at source at 20%.

Therefore my total taxable income will be £39,500.
I am in the UK.

I know that my age allowance will be £9,030.
I also know that if my total income is over £21,800, I will lose £1 of age allowance for every £2 over that. After this point I get a head ache and lose control of my bladder.

Is there anyone out there, a little (or a lot) brighter than I am who can just tell me how much the tax will be? Thanks.

Answer: Ok, here goes!

You are talking about tax year 2009-2010 but as those tax bands and allowances are not available yet we have to use 2008-2009.

You have interest of 24000 and pensions of 15500 so as you say taxable income is 39500.

Your personal allownces have been reduced to the basic amount of 6035, because of your income level. The difference takes you less than 6035 but the basic amount is always given as a minimum.

So, you have a taxable income of 33465.

But all of your income must be charged now at 20%. The 10% band was abolished and you do not meet the higher rate level.

So, 33465 @ 20% = 6693

Total tax due = 6693
But, you should have already paid 4800 at source on your interest which leaves 1893 due to pay.

If your earned income (pension) had not come above your allowances, you could still have had the 10% band on your interest income.

Thursday December 31 2009

DEC 31 — As a member of the Pakatan Rakyat Anti-GST Task Force, I write in response to the letter that appeared in The Star (Dec 24). The anonymous “Tax Accountant from Malacca” indeed said it all about the current acrimonious debate on the GST in his letter “We don’t need the GST to boost revenue”.

Contractors P60 why you need to keep it safe

Question: Definition of TAXABLE INCOME with respect to a corporation?

Can someone please tell me how one would calculate taxable income for a corporation in Ontario? Some say corporations are taxed on their gross revenue while others suggest taxable income is the same as net income. Corporate taxes are new to me and this is apparently too basic; I can't find it anywhere on CRA or Ontario's website!!
Thanks!!

Answer: It's ALMOST the same as net income... there are some adjustments to be made for tax purposes.

It's all here:

Splitting incomes on the cheap

Since the first Income Tax Act in 1917, our government hasn’t been keen on income splitting.

Question: funny or not?

Income tax is very familiar (and perhaps disliked!) by all who work, but many people do not understand fully how it is charged. It is an important tax to the government as it is its main revenue-raising tax, though despite that it only represents just over a quarter of total tax revenue. National Insurance and VAT come fairly close on the list in terms of importance.

Over 25 million individuals pay income tax in the UK, but not all income incurs tax. The main kinds of income upon which income tax is levied are pay, pension payments upon retirement, unemployment benefit, profits from business, income from property, bank and building society interest and dividends on shares. Income tax is not paid on certain privileged savings products such as National Savings Certificates
.The structure of income tax in the UK operates via a system of allowances and bands. All individuals have a personal allowance which is deducted from total pre-tax income in order to get to the taxable income.

Answer: You would have to work for the IRS to find any of that funny, or be on unemployment benefit.

Police overpaid, admits minister

JERSEY police are overpaid and their automatic salary increase system is ‘terrible’, the Home Affairs Minister admitted yesterday.

Question: Is the US President's salary considered taxable income?

If so, is his clothing and food allowances considered taxable income?
What other benefits/bonuses is taxable for a President of the United States?

I'm just wondering. Sources would be appreciated. Thanks.

Answer: The president is subject to the same tax laws as the rest of us.
Yes, the salary is taxable. The president can take deductions for legitimate work expenses.
As far as I know the president doesn't get any clothing or food allowances.
According to a White House manager interviewed on radio years ago, the first family pays for its own clothing and personal meals in the White House.
State dinners are paid from tax dollars.

Higher tax net could be spread more widely

THE new 50 per cent tax rate could affect more people than just those earning above the £150,000 threshold, a Yorkshire Bank wealth manager has warned. (01/01/2010 18:39:42)

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