Australian Individual Income Tax Calculation

This assignment involves calculating individual income tax for a hypothetical scenario in Australia. It includes determining various tax offsets such as Parent Tax Offset, MAWTO, LITO, and Medical Expenses Tax Offset. The calculation also incorporates the tax-free threshold and different income tax brackets. Finally, it determines the total tax payable, including the Medicare levy.

Running head: TAX
Tax
Name of the Student:
Name of the University:
Authors Note:

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Table of Contents
Assessment 1...................................................................................................................................2
Task 1...........................................................................................................................................2
Task 2...........................................................................................................................................3
Assessment 2...................................................................................................................................4
Case study 1.................................................................................................................................4
Case Study 2................................................................................................................................5
Case Study 3................................................................................................................................6
Case Study 4................................................................................................................................6
Assessment 3...................................................................................................................................7
Question 1....................................................................................................................................7
Part A...........................................................................................................................................7
Part B...........................................................................................................................................8
Question 2....................................................................................................................................9
Question 3....................................................................................................................................9

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Assessment 1
Task 1
Ryan's Statement showing calculation of Income tax Liability
Particulars Amount Amount
Gross Wages $ 78,800.00
70%franked dividend from F/S Ltd-amount received $ 2,900.00
Franking credit $ 870.00
Gross Dividend $ 3,770.00
Honorarium for duties as president of the swim club $ 350.00
Unfranked dividend from Back Ltd $ 1,750.00
Fully franked dividend from F/S Ltd-amount received $ 3,300.00
Franking credit $ 1,414.29
Gross Dividend $ 4,714.29
Bank interest $ 103.00
Tax deducted $ 97.00
Gross bank interest $ 200.00
Assessable Income $ 89,584.29
Deductions
Purchase of compulsory uniform $ 480.00
Laundry of uniform(estimate) $ 75.00
Investment journals $ 230.00
Sunglass used for driving $ 150.00
Total Allowable Deduction $ 935.00
Taxable Income $ 88,649.29
Income Tax Liability (17550+(88649-80000)X37%) $ 20,750.24
Medicare Levy (88649X1.5%) $ 1,329.74
Medicare Levy Surcharge (88649X1%) $ 886.49
HELP Repayment (less of 6600 or 8% of 88649) $ 6,600.00
$ 29,566.47
Less:
Franking Credit $ 2,284.29
TFN tax deduction $ 97.00
PAYG Withheld $ 20,500.00
$ 22,881.29
Net Tax Payable $ 6,685.18

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Task 2
Allowable deduction
Statement Showing calculation of deduction available to Hayden
Particulars Formula Amount
Espresso Machine (4,410/5) x 2 $ 1,764
Pizza Oven (15,753/10) x 2 $ 3,151
Nissan 60% for business
(26,917/8) x (2) x (9/12)
x (0.6) $ 3,028
Adjustment of balance
(26,917-3,028) = 23,889
- 25,000 $ (1,111.00)
Motor vehicle (57,466/8) x (2) x (3/12) $ 3,591.63
Cash Register (1,400/8) x (8/12) x (2) $ 233
New tables and chairs (2,800/5) x (2) x (6/12) $ 560.00
Construction Capital Works
(11,500 x 0.025) x
(7/12) $ 167.71
Low Value Pool (990+163+47) $ 1,200.00
Total Allowable deduction $ 12,584
Statement showing calculation of Low value pool assets
Particulars Formula Amount ($)
Opening balance 2640
Add:
Ceiling Fan 870
I Phone 4S 250
Less:
Decline in value 2640X37.5% -990
Ceiling Fan 870X18.75% -163
I Phone 4S 250X18.75% -47
Sales proceed -230
Closing Balance 2330

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Assessment 2
Case study 1
Statement showing calculation of Taxable Income of Dave
Particulars Amount Amount
Assessable Income
Sales of Instruments $ 449,000.00
Tuition Fees $ 55,450.00
Refundable fees $ (11,000.00)
Net tuition Fees $ 44,450.00
Interest from personal account $ 494.00
Insurance recovery $ 20,800.00
Sale of sheet music $ 1,420.00
Increase in Stock $ 12,000.00
Total Assessable Income (A) $ 528,164.00
Deductions
Rent of shop premises paid $ 28,000.00
Advance paid $ 4,000.00
Net rent paid $ 24,000.00
Purchases $ 180,000.00
Advertising $ 4,600.00
Superannuation for self $ 12,000.00
Wages to employees $ 22,500.00
Disallowed by Commissioner $ (12,500.00)
Allowable wages $ 10,000.00
Lease of delivery Van $ 45,000.00
Van running costs $ 14,550.00
Electricity & Telephone $ 4,900.00
Gift to school building fund $ 444.00
Insurance for contents of shop $ 490.00
Tax Agent $ 550.00
Legal Fees and stamp duty on business loan $ 167
Interest on business loan $ 3,400.00
Total Allowable Deduction (B) $ 300,101
Taxable Income (A-B) $ 228,063

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Case Study 2
Statement showing calculation of Taxable Income
Particulars Amount Amount
Assessable Income
Rent Income (including agents fees) $ 69,450
Rent received $ 1,640
Water rates recouped $ 1,040
Unpaid rent recovered (13400-10400) $ 3,000
Cost of Freehold land $ 420,000
Cost of Acquisition $ (140,000)
Additional expenses $ (15,450)
Gross Capital Gain $ 264,550
Less: Discount $ 132,275
Net Capital gain $ 132,275
Total Assessable Income (A) $ 207,405
Deduction
Water & Council Rates $ 3,200
Cleaning $ 740
Agents Fees $ 5,200
Building insurance $ 380
Repairs and Maintenance $ 4,400
Decline in Value Fixtures and Fitting $ 1,200
Painting of Harbord property $ 1,800
Travel to inspect properties $ 2,057
Strata Levy $ 2,400
Bank Charges $ 140
Total Allowable Deduction (B) $ 21,517
Taxable Income (A-B) $ 185,887.80

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Case Study 3
Statement showing calculation of Taxable Income of Jenny Gold
Particulars Amount Amount
Salary (Net) $ 59,570.00
Add: PAYG $ 10,430.00
Gross Salary $ 70,000.00
Redundancy payment $ 64,495.00
Long service leave $ 21,039.00
Annual leave $ 6,388.00
Superannuation lump sum benefit (taxed) $ 150,000.00
Taxable Income $ 311,922
Tax payable (54550+45%X(311922-180000) $ 113,914.90
Medicare Levy (311922-150000)X1.5% $ 2,428.83
$ 116,343.73
Less: Tax offset lump sum $ 81,462.55
$ 34,881.18
PAYG (10430+12200) $ (22,630.00)
Tax Payable $ 12,251.18
Case Study 4
Statement showing calculation of Operating Cost
Particulars Amount
Fuel $ 5,200.00
Insurance $ 920.00
Registration $ 350.00
Service/Repairs $ 1,040.00
Value decline (28200/8X200%) $ 7,050.00
Total operating cost $ 14,560.00

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Statement showing usage percentage
Particulars Amount
Salon to home $ 3,150.00
Home to salon $ 3,150.00
Salon to college $ 1,840.00
College to home $ 2,147.00
Other private travel $ 5,632.00
Travel to conference $ 900.00
Total $ 16,819.00
Work Related percentage (1840+900/16819) 16.29%
Calculation of Maximum Available deduction
Particulars Amount
Log book (14,560 x 16.29%) $ 2,372
One third Operating cost (14,560/3 ) $ 4,853
12% Original Cost (12% x 36,200) $ 4,344
Cents per km ( 5,000 km x 0.74 ) $ 3,700.00
Maximum Deduction $ 4,853.33
Assessment 3
Question 1
Part A
Statement showing calculation of Capital gain
Particulars Amount Amount
Gain on sale jeweler $ 3,900.00
Loss on sale of rare coin $ (850.00)
Loss on sale of painting $ (1,000.00)
$ 2,050.00
Gain on holiday house $ 120,000.00

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Gain on shares $ 1,500.00
Loss brought forward $ (9,000.00)
$ 112,500.00
Gross Capital Gain $ 114,550.00
less: Discount @ 50% $ 57,275.00
Net capital gain $ 57,275.00
Part B
Statement showing calculation of Capital gain
Particulars Amount Amount
Boat
Sales proceed $ 15,500.00
Cost $ 14,400.00
Gain on sale of boat $ 1,100.00
Investment property
Sales proceed $ 350,000.00
Cost $ 220,000.00
Gain on sale of Investment property $ 130,000.00
Shares in Angela Ltd
Sales proceed $ 1,500.00
Cost $ 4,000.00
Loss on sale of shares $ (2,500.00)
Shares in Louise Ltd
Sales proceed $ 12,000.00
Cost $ 2,200.00
Gain on sale of shares $ 9,800.00
Gross Capital gain $ 138,400.00
Less:
Discount @50% ( 138,400 - 7,300 ) x 50% $ 65,550.00
Net Capital gain $ 72,850.00

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Question 2
Statement showing Calculation of Tax offset
Particulars Amount Amount Amount
Parent Tax Offset (1,726 - (5,011-282/4) $ 544
MAWTO $ 500.00
LITO 1,500-(54,400 - 30,000 x 0.04) $ 524.00
Medical Expenses Tax Offset
Mack ( 220 + 2,200) $ 2,420.00
Jill ( 280 + 420 + 350 + 400 ) $ 1,450.00
Terry ( 125 + 80 ) $ 205.00
Beatrice ( 400 + 95 ) $ 495.00
Mitch ( 220 + 1,230 + 330 ) $ 1,780.00
$ 6,350.00
( 6,350 - 2,060 ) x 20% $ 858.00
Total tax Offset $ 2,426
Question 3
Statement showing Calculation of Tax Payable
Particulars Amount Amount
Taxable Income $ 72,000.00
Tax free threshold (500X6) $ 3,000.00
Income Tax
(37,000 - 3,000 ) x 0.15 $ 5,100.00
(72,000 - 37,000 ) x 0.30 $ 10,500.00
$ 15,600.00
Add Medicare Levy ( 72,000 x 1.5% x 166/366) 489.84
Tax Payable $ 16,089.84

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