Renato1
Established Member
- Joined
- May 1, 2015
- Posts
- 1,730
Red Herrings galore.Deductions are not red herrings. They are necessary, along with marginal tax bracket information, to help us find what our effective tax rate is. The effective tax rate is necessary to figure out what our tax liability is. Without knowing our liability, we can't tell how much we've got left after deducting our tax obligations from income.
All I've been trying to show you is how, if you don't look at the big picture, you're at risk of over-estimating the tax liability from earned interest. This in turn influences the effectiveness the strategy you've outlined in the first post.
However, as you've gotten a tax refunds, you at least have the necessary experience to see how estimating your tax liability based on a single income source can be misleading.
If deductions are as necessary as you claim, not to mention your supposed need to see how much PAYG you have paid - how pray tell did you work out the after-tax interest rate of 1.19% net without using those supposedly necessary deductions and PAYG?
I've given you a simple calculation which anyone who understands marginal tax rates can give the answer to in 10 seconds.
However, after more than 24 hours have elapsed, far from having calculated an answer using the supposedly equivalent average tax rate method, all I see is apparent prevarication.
Regards,
Renato
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