LAW PROJECT

This project analyzes the income tax liability of Piper and David, an Australian couple, for the current income year (CIY). It examines their income sources, allowable deductions, and the application of relevant Australian tax laws and regulations. The project also explores Piper's potential deductions for associated costs related to her preparation for the NSW Bar exam. This content is available on Desklib, a website that provides past papers and solved assignments for students.

LAW PROJECT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
QUESTION 1...................................................................................................................................1
Piper’s income tax liability for CIY.......................................................................................1
QUESTION 2...................................................................................................................................3
David’s income tax liability for CIY......................................................................................3
QUESTION 3...................................................................................................................................3
Piper claiming deductions for associated costs in Australian Income Tax............................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Income tax return payments has been payable by citizens in a country. Implication of
various acts, laws section in terms of identifying the suitable taxes will be levied on personal
income of an individual. In the present report there will be ascertainment of assessable income
generated by an Australian couple in a current financial year (CIY). Henceforth, there will be
implication of various taxation rulings and sections from several acts which will be helpful in
bringing them allowable deductions.
QUESTION 1
Piper’s income tax liability for CIY
In relations with analysing assessable income of Piper which is receiving income from two
sources. She works as a guest lecturer in Bo-tom University as well as also enrolled in volunteer
at local WA a private law firm (Cassidy, 2017). These are the two sources of her income along
with, there have been various expenses which she made for personal and for official use.
Claiming the deduction in her assessable income will help in reducing the tax payable by her on
her income.
She has a health insurance from a private health institution which she is not liable to
make any of the surplus payment for Medicare levy. PAYG has been withhold by her that will be
deductible from taxation (Jing, 2017). Moreover, she has bought a printer that will be used for
official as well as personal purposes. In addition, all income and expense will be analysed with
the motive of determining the suitable taxes that has to be payable by her in current income year.
Income tax liability of Piper
Particulars Details Amount (in $)
Bo- tom university Guest lecturer 42500
volunteer local WA 155000
less: health insurance 250
Total Income 197250
less: Allowable deductions
Depreciation on portable printer 63.56
Tickets Nouveau Opera Theatre 800
Total allowable deductions 863.56
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Taxable expenses
Food 6500
Assessable income 202886.44
Taxable slab 180001 and over
54097+45%
11386.44
Tax 11386.44*45% 5123.898
Add: 54097
Total taxable income 59220.898
less: PAYG 5684
Add: Medicare Levy Surcharge
$140000 or more (1.5% of
197250) 2958.75
Total income tax payable 259382.09
Medicare levy
Surcharge Details Amount
Piper's income 197250
Threshold Single
$140001 or
more
Rate 1.50% 2958.75
Prime cost method of depreciation on printer
Particulars
Amount
(in $)
Prime cost method for
depreciation
Asset's cost * (days held/ 365)* 100%/ asset's effective
life)
Asset's cost 300
Personal use 200
Total days 232
Asset's Life 2
Total depreciation 63.5616
Interpretation: On the basis of above tables, Piper’s assessable income has been analysed
with considering all the taxation terms. As per Australian taxation office (ATO), there are
various expenses which were being exempted from the total operations made by her. Piper has
gains from Bo-Tom university as $42500 and from local WA as $155000. Glitch of computer
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was of $1000 as well as CIY income of $1000 which all together brings the total earning of
$197250. Therefore, her income comes under the taxation slab of $180000 and over where it will
be charged 45%+54097 on amount exceeding $180000 (Individual income tax rates, 2018).
Allowable deductions have been awarded to Piper on her various expenses such as food
expenses which will be exempted up to $5000 while $1500 will be taxable, depreciation on
printer has been charge with considering the prime cost method (Prime cost (straight line) and
diminishing value methods, 2018). Tickets as a gift will be deductible from her income as an
exemption (Section 40-95,40-100 & 40-105 of ITAA 97). The health insurance and PAYG will
be reduced from total assessable income. Moreover, after analyzing all expenses and income
which ascertains the total income has been payable by her is around $259382.09. However, Piper
will not be charged for Medicare Levy it is because she has obtained a private health insurance
of $250. The Medicare levy surcharge will be 1.5% charges over income as per the threshold of
$140001 or more.
QUESTION 2
David’s income tax liability for CIY
David is a Full-time lecturer and have no any other source of his income. Along with this,
there has been no any further expenses made by him in a year (Lal and et.al., 2017). Moreover,
there will be analysis on income generated by David in this respective period with implicating a
proper rate of charges on it.
David
Particulars Details Amount
Income of David 55000
Taxable slab 37001-90000
rate 3572+ 32.5%
55000-37000 18000
Tax 18000*32.5% 5850
Add: 3572
Total 9422
Add: Medicare levy 0% 0
Total assessable income 9422
Medicare levy
Surcharge Details Amount
David's income 55000
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Threshold Single $90000 or less
Rate 0.00% 0
Interpretation: In consideration with income generated by David which is around $55000
from his employment. It comes under taxable slab of $37001-$90000 as consist of rate 32.5%
plus $3572. However, the total income tax will be payable by him is of $9422 on his income
(Tax calculation, 2018). Along with this he is not having any private health insurance than he
will be liable for making payments in Medicare Levy (0%) as the salary is below the threshold of
Medicare levy surcharge. After charging all surplus amounts the total assessable income of
David is $9422 for the current income year (CIY).
QUESTION 3
Piper claiming deductions for associated costs in Australian Income Tax
Piper has planned to prepare for NSW bar exam on which she has expectation for having
deduction in income tax (Deutsch, 2018). Thus, there are several norms which have been levied
by Income Tax Authority of Australia, 1997 such as:
 She cannot claim the costs of admission fees, but she can claim deductions on costs
which will be used for renewing license for her annual practices as a legal adviser in law
firm (Whiteford, 2017).
 There can be allowances which are awarded to a person based on capital gains or losses.
However, as per acknowledging all the norms on which it can said that, the plan for having
study for NSW bar examination, there are various charges which were being payable by Piper
such as admission fees etc. (Maurer and et.al., 2017). Claiming the deductions will be help her in
reducing costs of study as well as income tax payable by her.
CONCLUSION
On the basis of above report, it can be concluded that, influences of acts, laws and regulation
in terms of analyzing the taxable income were being payable by an individual on income or gains
is necessary. The analysis of Piper’s and David’s assessable income was analyzed for better
determination of all allowances or deduction on which they had claimed. Further, reports had
presented advices to Piper in claiming deductions in her study for NSW Bar exam.
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REFERENCES
Books and Journals
Cassidy, J., 2017, January. A GST with GRRRRRR: Legislative responses to GST tax avoidance
in Australia and New Zealand. In Australasian Tax Teachers Association Conference
2017.
Deutsch, R., 2018. Numbers, numbers, numbers-What does it all mean?. Taxation in
Australia. 52(11). p.593.
Jing, B., 2017. Income tax implications of investing in a combined share and rewards-based
crowdfunding campaign in Australia. AUSTRALIAN TAX REVIEW. 46(1). pp.48-60.
Lal, A. and et.al., 2017. Modelled health benefits of a sugar-sweetened beverage tax across
different socioeconomic groups in Australia: A cost-effectiveness and equity
analysis. PLoS medicine. 14(6). pp.e1002326.
Maurer, L. and et.al., 2017. A Brave New Post-BEPS World: New Double Tax Treaty Between
Germany and Australia Implements BEPS Measures. Intertax. 45(4). pp.310-321.
Whiteford, P., 2017. trends in income inequality in australia. AQ-Australian Quarterly. 88(3).
p.30.
Online
Individual income tax rates. 2018. [Online]. Available through :<
https://www.ato.gov.au/Rates/Individual-income-tax-rates/>.
Prime cost (straight line) and diminishing value methods. 2018. [Online]. Available through :<
https://www.ato.gov.au/business/depreciation-and-capital-expenses-and-allowances/
general-depreciation-rules---capital-allowances/prime-cost-(straight-line)-and-
diminishing-value-methods/>.
Tax calculation. 2018. [Online]. Available through :<
http://taxsummaries.pwc.com/ID/Australia-Individual-Sample-personal-income-tax-
calculation >.
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