Bruce Lee Individual Taxation Laws: Computation of Tax, Australian Law

This report covers the computation of tax liabilities of Bruce Lee on the basis of Australian taxation laws. It also includes tax planning for reducing the tax payment of Bruce Lee. Additionally, it covers the computation of tax liabilities of H Private Limited on the basis of income earned from every source.

Bruce lee individual taxation laws
Computation of tax, Australian Law
Individual tax
Name of the author
University Name-

Table of Contents
INTRODUCTION.................................................................................................................................2
Answer to question no-1.......................................................................................................................2
Computation of tax liabilities of Bruce Less on the basis of Tax rates in 2017-2018............................3
Tax computation of Bruce Lee for the year 2017-2018.....................................................................4
Tax planning for reducing the tax payment of Bruce Lee......................................................................9
CONCLUSION.....................................................................................................................................9
Answer to question no-2.....................................................................................................................10
REFERENCES....................................................................................................................................11

INTRODUCTION
Answer to question no-1
It helps individuals to lower down the taxable income so that they have to pay less amount of
tax on their income. It is analyzed that with the changes in economic, each and every
individual has to comply with the applicable rules and Australian laws. In this report
computation of tax liabilities of Bruce Lee have been made. After that, there are several
suggestions and tax planning process has been prepared which will lower down the tax
payment of Bruce Lee.

Computation of tax liabilities of Bruce Less on the basis of Tax rates in 2017-2018
The tax rate for the computation of individual is given in the Australian slab rate
which will help in determining total tax liability of Bruce Lee. As per the Australian taxation
laws, Firstly, the residential status of Bruce Lee will be determined. After that his income will
be computed on the basis of his earning from every possible source. He will not be liable to
pay tax on the income till $ 18,200. After that he will be liable to pay 19c for each $1 over
$18,200 in the band limit stated $ 18,201 - $ 37,000. After that, the same tax computation
will be made on the basis of the table shared as below (Cobiac, Tam, Veerman, and Blakely,
2017).
Computation of the taxable income Tax charges on the Income
0 - $ 18,200 Nil
$ 18,201 - $ 37,000 19c for each $1 over $18,200
$ 37,001 - $ 87,000 $3,572 plus 32.5c for each $1 over $37,000
$ 87,001 - $ 1,80,000 $19,822 plus 37c for each $1 over $87,000
$ 1,80,001 and over $54,232 plus 45c for each $1 over $180,000
However, while computing the tax liabilities of individual, there is need to see the Medicare
tax implication as well (Burkhauser, Hahn, and Wilkins, 2015). It is analyzed that Bruce lee
would be liable to pay Medicare tax at the rate of 2% on his total earned income as he has not
taken any medical insurance and other facility. Medicare tax is mandatory required to be paid
by Bruce lee as he has not taken any medical insurance from any other sources. He will pay
Medicare levy surcharge on his earning at the % of 1.5. Furthermore, the previous year losses
of the Bruce Lee will also be deducted from the present year income which will assist in

lower down his taxable income. The PAYG tax is also deducted from the computed tax of
Bruce Lee (Hennighausen, and Heinemann, 2015).
Tax computation of Bruce Lee for the year 2017-2018
Tax of the Bruce Lee will be computed on the basis of Australian taxation laws and
considering the tax slab rate. He will be liable to pay tax on his earned income (Nong, Meng,
and Siriwardana, 2017)

Compute tax income- Brue Lee
FOR THE YEAR ENDED 30TH JUNE 2018
PARTICULARS AMOUNT
($)
AMOUNT
($)
INCOMES
Professional legal fees 340000
Dividends received from an Australian resident company fully
franked
7000
Salary received from part time lecturing at the university 40000
Interest on bank deposits 5000
Profit on Sales of equipment 2000
Rental income from an investment property 10000
Total 404000
LESS : EXPENSES
Office rent 14000
Payment to cleaning contractor 10000
Salary paid to employee secretary 50000
Purchase of new calculator 290

The tax of the Bruce Lee has been computed on the basis of tax slab rate. However,
Medicare tax surcharge has been additionally computed at the rate of 2% on his income. He
has to pay Medicare tax as he has not taken any health insurance. The Medicare insurance
cover will be done at the rate of 2% on the income exceeding 140,000. The PAYGT tax $
6000 will be paid in his total income (Saad, 2014).

Bruce Lee tax Computation
FOR THE YEAR ENDED 30TH JUNE 2018
PARTICULARS AMOUNT ($) AMOUNT ($)
0 - $ 18200 0
$ 18201 - $ 37000 3572
$ 37001 - $ 87000 16250
$ 87001 - $ 180000 34410
$ 180001 and above 48245
Total 102367
Add: Medicare levy @ 2% 5867
Medicare levy surcharge @ 1.25 % 3588
Total tax computed on taxable income 111822
Less: PAYGW 6000
TAX PAYABLE 1058

Tax planning for reducing the tax payment of Bruce Lee
There are several ways which could be used by Bruce lee to reduce his tax liabilities.
However, these all steps come under the tax planning process. The main idea of tax planning
was undertaken with a view to strengthen the economics of country.
 Bruce lee being individual could invest his capital in some of the institutions and boards
which would make him eligible for the deduction.
 He needs to increase his taxable expenses so that his taxable income could be lower. It will
not only assist him to save tax but also lower down the tax implication on his income.
 He should invest his capital in particular stocks which is tax free and allow him to avail tax
benefits (Sawyer, and Sadiq, 2018).
 Bruce Lee needs to take tax planning assistance from the agency and certified public account
which will be useful for him to lower down his taxable income. It will also assist him to
understand various taxable incomes in effective manner.
 Tax agents will assist Bruce lee to understand the taxation concepts and possible areas which
will lower down his tax liabilities.
 Bruce lee needs to invest some part of his income in the provident funds and specified deposit
funds which are specified by Australian government as tax deduction sources for individual.
 The proper tax planning and methods adopted by the Bruce lee should be done after taking
assistance from the tax agent. It will help him to determine the best possible way which
would lead him to lower down his tax liabilities in best and effective manner.
 Medicare tax at the rate of 2% on his total earned income as he has not taken any medical
insurance and other facility. This amount of tax could be saved if Bruce Lee could have taken
Medical insurance. However, he will have to Medicare levy surcharge on his earning at the %
of 1.5 (Sowa, et al., 2018).
CONCLUSION
After analysing all the applicable laws and rules of Australian taxation, it is
considered that if individual wants to lower down his tax liabilities then he could take tax
exemption and tax deduction process. The tax exemption is given to individual only on
certain cases which was done by government to promote certain society and economic at
large. For instance, investing in particular funds will be covered in the tax exemption cases. If
Bruce lee invest his capital as donation or hand over his capital to the government department

as his social responsibilities then the amount invested will be eligible for the tax deduction
from the total computed taxable income of Bruce Lee. There are several other ways which
could be undertaken by Bruce Lee to lower down his tax liabilities. He needs to efficiently
use these sources for reducing his tax liabilities.
Answer to question no-2
In this part, profit of H private limited will be computed on the basis of his business
transactions and Australian income tax laws and regulation laws. Tax is the amount of money
which is required to be paid by tax payer as his mandatory responsibilities towards the
economic and society. In order to compute the taxability of the individual, there is need to
follow proper Australian tax laws and regulation. Tax planning is the method which could be
used by individual to lower down the tax burden (Sawyer, and Sadiq, 2018).
The computation of the tax liabilities of company is done by adding income from every
sources. It will include income from capital gain, business head, and other sources.
In this case, tax liabilities of the H private Limited is computed on the basis of income earned
from every sources. The cost of the first apartment would be computed on the basis of cost
of building and construction i.e. $ 200000. After that if any profit arise to H private limited
then it will be chargeable at the rate of 27.5%.
However, there are several ways which could be used by H Private limited to reduce his tax
liabilities.

REFERENCES
Burkhauser, R.V., Hahn, M.H. and Wilkins, R., 2015. Measuring top incomes using tax
record data: A cautionary tale from Australia. The Journal of Economic Inequality, 13(2),
pp.181-205.
Cobiac, L. J., Tam, K., Veerman, L., and Blakely, T. 2017. Taxes and subsidies for
improving diet and population health in Australia: a cost-effectiveness modelling study. PLoS
medicine, 17(3), pp.25-29
Hennighausen, T. and Heinemann, F., 2015. Don't tax me? Determinants of individual
attitudes toward progressive taxation. German Economic Review, 16(3), pp.255-289.
Nong, D., Meng, S., and Siriwardana, M. 2017. An assessment of a proposed ETS in
Australia by using the MONASH-Green model. Energy Policy, 108, 281-291.
Saad, N. 2014. Tax knowledge, tax complexity and tax compliance: Taxpayers’
view. Procedia-Social and Behavioral Sciences, 109, 1069-1075.
Sawyer, A.J. and Sadiq, K., 2018. Enhanced Tax Reporting Requirements under the BEPS
Project: Preparing the Profession. 16(4), pp.28-39
Sowa, P.M., Kault, S., Byrnes, J., Ng, S.K., Comans, T. and Scuffham, P.A., 2018. Private
health insurance incentives in Australia: in search of cost-effective adjustments. Applied
health economics and health policy, 16(1), pp.31-41.