# Income Taxes in Australia



## NathanMerka (Oct 4, 2015)

Any and all advice on taxes for American Citizens living in Australia as permanent resident with sc100 visa. But income is all W2 and K1 Shareholders income from American company. I assume I only pay taxes in Australia since I would live there, yet required to file taxes in both countries? Any deductions or tax credits, also trying to forecast tax liabilities. Family of 4, with 2 young children, stay at home mom, and my US income. Apprx 100,000 aud income.


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## JandE (Jul 17, 2015)

Tax can be calculated using this: 
Income between $80,001 – $180,000
Tax = $17,547 plus 37c for each $1 over $80,000
Plus 2% medicare levy on total. 
If the US income is in joint names then this will change.


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## NathanMerka (Oct 4, 2015)

Thanks JandE,

I am still very confused about how my Tax situation will play out. Wife and I are both US Citizens with Permanent Resident status in Australia. Since I will live in Australia, but all work income is from US, I am so confused. I guess I have tax questions regarding both Countries. 
There is a tax treaty with US and Australia, so I will not pay taxes in both Countries? Do I pay in the country I live, or the country I work? Who gets my money!
When I file US taxes, I assume it gets reduced to zero with the Foreign Earned Income Exclusion, Foreign Tax Credit and Foreign Housing Allowance? So If I would not pay income taxes to the US, how to do I get back taxes taken from my US paycheck since it was W2?
When I files Australia taxes, I am aware of the chart that that specifies the tax %. Is that on Gross Income, or Adjusted Gross Income. Does Australia have deductions and credits to adjust taxable income and liability? Do you get a credit/deduction for children?
I know these are very specific questions, and I will need to contact an accountant with experience, but wanted to get some info before calling so I can ask the right questions.


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## JandE (Jul 17, 2015)

Australian tax is basically a simple one rate fits all, but with deductions for some allowable expenses dependant on your occupation.

There are no allowances for children etc, like in some countries. 
A different department will pay the child allowances fortnightly to those who are eligible.

I normally did UK and Aus tax comparisons, but have no knowledge of US tax workings. Normally the place of residence will get your tax, but I also know that the US needs tax returns done for its people who reside and work overseas, at least in some countries.

You will need a proper accountant who knows both countries systems. Not the common H&R Block type tax agents.

You also need to see if your income from USA can be split somehow between husband and wife before it arrives in Aus, but that only applies if Australia will be the highest taxation figure, and you can receive it as untaxed at source in the US.
You mentioned you get Shareholders income, if these shares were split between husband and wife, then the tax would be lowered.

A good accountant will know exactly what questions to ask you, to get the right results.


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## miawilson (Dec 28, 2015)

I think I also have the same concern for my husband, although we are not yet permanent residents of Australia. Where should he pay income taxes?


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## JandE (Jul 17, 2015)

miawilson said:


> I think I also have the same concern for my husband, although we are not yet permanent residents of Australia. Where should he pay income taxes?


Once tax resident in Australia he will pay Australian tax on his income, and offset that against any tax liability to the US.

With the complex tax structure that the US government has for taxing overseas Americans, I think you will need a specialist...


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## Jim2016 (Mar 24, 2016)

Hi Nathan ... have you had a look around the Australian Taxation Office (ATO) website ?


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