How To Calculate Taxable Income
This VideoJug film is designed to show you how to calculate your taxable income. So, follow this simple guide and figure out how much you owe the government.
I'm going to talk to you about how to calculate your taxable income. With this, there are many ways to do this. Often, a key way is to use an online calculator.
Remember, lots of people also have the ability to accrue allowances against their taxable income, although this does depend on how much they owe. In other words, what tax bracket they might fall in along with their age, taxable income doesn't just relate to your salary, but may also relate to other sources of income that you may receive. This is such as interest, dividends, or indeed pension income.
I'm going to demonstrate to you how to calculate your taxable income, whether it be from conventional salary, dividends, interest, or indeed pensions. The count rates we are going to use for this particular example can be found on the Essentially Financial website. In this example, we are going to see that the individual has a salary of 30,000 pounds, and is under the age of 65.
By clicking the calculate button, it tells us the precise amount of income tax they will pay. If we then adjust the figure to 20,000 pounds and assume that the individual is over the age of 65 and under the age of 74, again by clicking the calculate button in this instance, it shows us the effects of the allowances they will receive. However, to demonstrate this further, if we adjust the age to assume they were under 65, we can see the differential of the tax they would pay, somewhere in the region of 400 pounds.
So as you can see, it is really easy with a tool like this to establish what your taxable would be, in conjunction with your income and your age. And that's how to calculate your taxable income. .