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}\text{\$0 – \$18 200}\rule[-1ex]{0pt}{0pt} & \text{Nil}\\
\hline
\rule{0pt}{2.5ex}\text{\$18 201 – \$37 000}\rule[-1ex]{0pt}{0pt} & \text{19 cents for each \$1 over \$18 200}\\
\hline
\rule{0pt}{2.5ex}\text{\$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}\text{\$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}\text{\$180 001 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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