Theo is completing his tax return. He has a gross salary of $82 521 and income from a rental property totalling `$10\ 920`. He is claiming `$13\ 420` in allowable deductions.

1. Determine Theo’s taxable income.   (1 mark)
   

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2. Using the tax table below, calculate Theo’s tax payable.   (2 marks)

\begin{array} {|l|l|}
\hline
\rule{0pt}{2.5ex}\textit{    Taxable income}\rule[-1ex]{0pt}{0pt} & \textit{    Tax payable}\\
\hline
\rule{0pt}{2.5ex}\$0 - \$18 200\rule[-1ex]{0pt}{0pt} & \text{Nil}\\
\hline
\rule{0pt}{2.5ex}\$18 201 - \$37 000\rule[-1ex]{0pt}{0pt} & \text{19 cents for each \$1 over \$18 200}\\
\hline
\rule{0pt}{2.5ex}\$37 001 - \$80 000\rule[-1ex]{0pt}{0pt} & \text{\$3572 plus 32.5 cents for each \$1 over \$37 000}\\
\hline
\rule{0pt}{2.5ex}\$80 001 - $180 000\rule[-1ex]{0pt}{0pt} & \text{\$17 547 plus 37 cents for each \$1 over \$80 000}\\
\hline
\rule{0pt}{2.5ex}\$180 001\text{ and over}\rule[-1ex]{0pt}{0pt} & \text{\$54 547 plus 45 cents for each \$1 over \$180 000}\\
\hline
\end{array}

3. In addition to the above tax, Theo must also pay a Medicare levy of $1600.42
4. Theo has already paid `$20\ 525` as Pay As You Go (PAYG) tax.
5. Should Theo receive a tax refund or will he owe more tax? Justify your answer with calculations.   (2 marks)
   

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