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My wife & I currently both work full-time (in Australia) and I'm curious what changes would take place to our income taxation when we move from 2 incomes & no dependents to 1 income with 1 non-working parent + child(ren).

How does taxation change when one has dependents? My goal is to maximise our income when we do get pregnant, is there anything I can or should do to help our financial situation?

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Without the numbers, it is difficult to quantify. The rules are quite complex.
For families with dependent children the income tax system includes a supplementary set of rules known as Family Tax Benefits (FTB) that are applied in a more complex way by different departments. The benefits and thresholds vary depending on the number of children, and which of the married partners earns the additional income.

There are two parts, FTB-A and FTB-B.

For FTB-A each family receives a payment for each child. In 2008/9 this was

Value Age
$4,631 under 13
$5,818 13..15
$1,945 16..17
$2,379 18..24 (if still dependent)

These payments are reduced by 20% for total family income over $42,559 ($45,114 for 2010/11). It plateaus at roughly $1,300 per child until income over $94,000 is reached, at which point it is reduced by 30%.

FTB-B pays about $3,358 if the youngest child is under 5, $2,339 if 5..15. Only one payment for the youngest child is made. The payment is means tested on the income of the parent with the lower income, reducing by 20% for income over $4,526 ($4,745 for 2010/11).

Income is calculated more strictly for FTB purposes. For example, investment losses are considered to be income for the purpose of FTB, and salary sacrifice superannuation contributions are also counted as income.

There are other benefits related to this, for example the 2009 stimulus package included payments to those who received FTB-B.

The full system is more complex, and some information can be found on the websites of the Australian Tax Office, Centrelink, and the Family Assistance Office.

Refer to http://en.wikipedia.org/wiki/Income_tax_in_Australia
and http://www.taxpayersassociation.com.au/tax-rebates-offsets/can-you-claim-the-dependent-spouse-offset.html

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