Some taxpayers might be wondering when they find an additional levy along with Medicare levy after preparing their 2012 Tax Return. That is Flood Levy.
The government has introduced a temporary levy, which applies to taxable income for more than $50,000 for the 2011/12 financial year only. But if the taxable income is less than $50,000, no flood levy will be charged.
Generally the charge will be half a cent for each $1 more than $50,000 for the taxable income between $50,000 and $100,000 and $250 plus 1 cent for each $1 more than $100,000.
There is another levy or surcharge that some taxpayers might have to worry about. That is Medicare Levy Surcharge (MLS) also along with Medicare levy. You might have to pay MLS for any period during the year that you or any of your dependants did not have private health insurance and you were single with no dependants and your MLS purpose income is greater than $80,000 or you were a member of family and your family’s combined MLS purpose income is normally greater than $160,000.
When taxpayers have to decide, regardless of lifetime loading issues, whether they have to get a private health insurance to avoid a possible MLS, they should consider some factors because the definition of the MLS purpose income is a bit different from normal taxable income.
MLS purpose income will include the following items, such as reportable fringe benefit, reportable employer super contribution, net investment loss, net rental loss. Therefore knowing your possible taxable income for the tax year and if you believe you do not have to pay Medicare Levy Surcharge based on the taxable income, you might be surprised when you find some surcharges because your possible net rental or investment losses were added up to your normal taxable income which you might have forgot.