Tax Documentation for Individuals

This document provides comprehensive tax documentation for individuals, including calculations for taxable income, deductions, capital gains, and more. It covers various scenarios and provides step-by-step calculations for each. This study material is useful for tax preparation and understanding individual tax obligations.

TAX DOCUMENTATION FOR
INDIVIDUALS

TABLE OF CONTENTS
TABLE OF CONTENTS................................................................................................................2
Q1-d.............................................................................................................................................1
Q2-...............................................................................................................................................1
Q3................................................................................................................................................2
Q5................................................................................................................................................2
Q6................................................................................................................................................3
Q7................................................................................................................................................4
Q8................................................................................................................................................5
Q9................................................................................................................................................6
Q10..............................................................................................................................................6
Q11..............................................................................................................................................7
Q15..............................................................................................................................................1
Q 16.............................................................................................................................................2
Q18..............................................................................................................................................2
Q19..............................................................................................................................................3
Q21..............................................................................................................................................4

Q1-d.
Taxable income of Will = $36,000
Taxable income of Tina = $22,000
No of dependants – 2
=(1500*2)=3000
= $61000*2%=1220
Q2-
In the Books of Fred:
Particulars Amount
$
Amount
$
Assessable Income
Taxable Income 145,345
Reportable Fringe Benefits 17,170 162515
Income of Wife 27000
Total Assessable Income 189515
Tax on Taxable Income
(54097+45C for each $ above
180000)
58378.5
Add: Medicare Levy@2% 3,790.3
Add: Medicare Levy
Surcharge@1%
1895.15
Less: PAYG Instalments 13,480
Total Tax Payable
50584.2
1

Q3
Q5
Statement showing calculation of Yvette’s taxable income for the 2017/2018 tax
year
Amt
$
Amt
$
Interest (net) 1000
Interest from United Kingdom (net) 3000
Dividend from the U.S. State of Georgia 6000
Gross salary-Australian employment 26285
Reportable Fringe Benefit Summary 6252
Bonus from Australian Employer for exceptional performance 2000
Salary from New Zealand Employment 15190
Total Assessable Income 59727
Deductions:
Interest and Dividend deductions relating to United Kingdom and
Georgia investment
250
Work-related deductions relating to Australian Employment 300
Total Allowable deductions 550
Taxable Income 59177
b
2
Particulars Amount
$
Amount
$
Assessable Income:
Gross Wages $78,000
Christmas Bonus $10200
Travel Allowances $2,800
Total Assessable Income $91000
Allowable Deductions:
Health Insurance 2,750
Fringe benefit taxes 550
Superannuation Contribution 10,000
Total Allowable Deductions $13,300
Total Taxable Income $73,500

Interest (net) 1000
Interest from United Kingdom (net) 3000
Dividend from the U.S. State of Georgia 6000
Gross salary-Australian employment 26285
Reportable Fringe Benefit Summary 6252
Bonus from Australian Employer for exceptional performance 2000
Salary from New Zealand Employment 15190
Total Assessable Income 59727
Deductions:
Interest and Dividend deductions relating to United Kingdom and
Georgia investment
250
Work-related deductions relating to Australian Employment 300
Total Allowable deductions 550
Taxable Income 59177
Tax on Taxable Income 10779.53
Add: Medical Levy 1183.54
Total Tax 11963.07
Less: Interest TFN 510
Tax withheld 490
Interest of UK Withheld 300
US Dividend Withheld 2100
PATG Withheld Tax 5258
Tax withheld on new Zealand employment 2540
Total tax witheld 11198
Total Tax Payable 765.07
Q6
Computation of Capital Gains
Particulars Amount $
Sales of Vacant Land 125,000
Indexation
Less: Cost Base(74000*1.639) 121286.8
Capital Gains 3713.25
Sales Proceeds from shares 32,000
Less: Cost Base 8,000
Capital Gains 24,000
50% CGT Discount 12,000
Capital Gains 12,000
3

Q7
Capital Gain Tax Calculations for the Year Ended 2017
Indexed Capital Gains
Amount
$
Amoun
t
$
Shares in AAA:
Sales Proceeds 71000
Indexation Cost Base(48000*1.516556) 72794.7
Capital loss 1794.70
Indexed Capital loss -
1794.70
Share in BBB:
Sales Proceeds 77000
Cost Price(62000*1.315) 81559.95
Capital loss 4559.95
Indexed Capital loss -
4559.95
Share in CCC:
Sales Proceeds 35000
Cost Price(49000*1.1753) 57592.9
Capital loss 22592.9
Indexed capital loss -
22592.9
Total Capita loss 28947
Capital Gain Tax Calculations for the Year Ended 2017
50% CGT Discount
Amoun
t $
Amoun
t $
Shares in AAA:
Sales Proceeds 71000
Cost Price 48000
Capital gains 23000
50% CGT Discount 11500
4

Share in BBB:
Sales Proceeds 77000
Cost Price 62000
Capital Gains 15000
50% Discount 7500
Share in CCC:
Sales Proceeds 35000
Cost Price 49000
Capital loss -14000
Capital Gain Tax Payable 5000
Therefore, Brad should include in his assessable income the sum
of $5,000
Q8
Six-year exemption
Total No. of days the house was held as main residence
= 365 x 8 years = 2920 days
Total No. of days the house was not the main residence
= 365 x 2 years = 730 days
5
Particular Amount
$
Sales Proceeds 705,000
Cost Price 475,000
Assessable 230,000
Total capital gains from CGT event
No of days in
ownership
period when
the dwelling
was not main
residence
Total No of
days when the
property was
under
ownership

Assessable Capital gains = 230,000 x (730 / 2920)
230,000 x 730 / 2920 = 57500
Q9
Calculation of Elizabeth Taxable Income
For the year ended 2016/2017
Particular Amount ($) Amount ($)
Assessable Income
Receipt of Pension 25,000
Unfrank Dividend 39,000
Total Taxable Income 64,000
Witholding tax (15%) 5850
(b.) Calculation of Elizabeth Taxable Income
For the year ended 2016/2017
Particular Amount ($) Amount ($)
Assessable Income
Receipt Pension 25,000
Unfrank Dividend 39,000
Total Taxable Income 64000
Tax on Taxable Income 12,347
Medicare Levy 1,280
Less : Withholding tax(15%) 5850
Total Tax Payable 7777
Q10
a.
Calculation of Stan Taxable Income
For the year ended 2016/2017
Particulars Amount
($)
Amount ($)
6

Assessable Income
Gross Wages 85,000
Receipt of Superannuation Lump sum
Taxable Component – Taxed element (up to low rate
cap of $210,000)
100000
Total Taxable Income 185000
b.
Calculation of Stan Taxable Income
For the year ended 206/2017
Particulars Amount
($)
Amount ($)
Assessable Income
Gross Wages 85,000
Receipt of Superannuation Lump sum 100000
Taxable Component – Taxed element (up to low rate cap
of $190,000)
185000
Total Taxable Income 63,232
Add: Taxable Component – Tax element (over the low
rate cap) (100000 @ 17% = $19,550)
17000
Add: Medicare levy 3700
Less: PAYG Lump sum 28170
Less: PAYG Tax Withheld from salary 22,110
Total Tax Payable 33,652
Q11
Calculation of Tammy Taxable Income for the year ended 2017/2018
Particulars
A.
Amount ($) Amount
($)
Assessable Income 36,290
Super Income stream benefit 40,000
Superannuation lump sum 160000
Total Assessable Income 236290
B.
Assessable Income 36,000
Super Income stream benefit 40,000
7

Superannuation lump sum 160000
Total Assessable Income 236290
Total Taxable Income 76290
Tax on Superannuation (160000*15%) 24000
Tax on Taxable income 16,341.25
Add: Medicare levy 1,525.8
Less: PAYG Withheld 9,780
Less: PAYG Tax 9,035
Less: Superannuation Lump sum PAYG 34,500
Total Tax Payable 59447.95
8

Q15
(a)
Calculation of Deductions for the year ended 2017/2018 Amount $
Payment to Australian Post 100
Not allowed as deduction Nil
(b)
Calculation of Deductions for the year ended 2017/2018 Amount
$
Instalment for October 6,000
Instalment for January 6,000
Instalment for April 6,000
Total Allowable Deductions 18,000
©
Calculation of Deductions for the year ended 2017/2018 Amount
$
Payment to Tax Agent 300
Deductions are allowed in the year payment is made.
(d) Not allow for deduction
(e)
Calculation of Deductions for the year ended 2017/2018 Amount
$
Payment of Payroll Tax 42,000
Total Allowable deductions Nil
Deductions are allowed when the taxable wages go beyond the threshold limit.
(f) Not allowed for deduction
(g) Allowed as deduction as travelling expenses related to meeting the tax agents can be claimed
as deduction.
(h)
Calculation of Deductions for the year ended 2017/2018 Amount
$
Payment of Land Tax 11800
No deduction Nil
(i)

Calculation of Deductions for the year ended 2017/2018 Amount
$
Payment of Land Tax 18900
No deduction Nil
(J)
Calculation of Deductions for the year ended 2017/2018 Amount $
Payment to Solicitor 700
Total Allowable deductions 700
(k)
Calculation of Deductions for the year ended 2017/2018 Amount $
Allowable on interest paid 200
No deduction is allowed on income tax paid and penalties
Q 16
Required: Calculate Ricky’s taxable income for the 2017/18 tax year.
In the books of Ricky for the year ended 2017/2018 Amount $ Amount $
Assessable Income:
Gross Income 1,638,940
Total Assessable Income 1,638,940
Expenses Eligible as Deductions:
Net Wages to employees 743,900
Entertainment of employees 5,380
Annual Leave paid 14,780
Rent paid 65,000
Employees superannuation contributions 98,020
Personal superannuation 50,000
Decline in value 46,780
Other overhead paid 69,330
Total Allowable Expenses 1,093,190
Total Taxable Income 545,750
Q18
A) Trevor Shop Fitting:
2

Opening adjustable value 5600
Effective life (year) 10
Depreciable value 241.89
B)
Opening adjustable value 11,000
Effective life (year) 5
Depreciable value 2200
The Net amount of capital gains computation below:
=($9,200 – $5000 ) -2200
= $ 2000
Q19
Calculation of Meghan Taxable Income 2017/2018 Amount $ Amount $
Assessable Income:
Income Stream Benefit 17,000
Gross Wages 22,000
Australian Source Dividend Income:
Fully Franked Dividend 4,900
Franking Credit 2,100 7,000
Total Assessable Income 46,000
Allowable Deduction:
Private Health Insurance 3,000
Total Allowable Deductions 3,000
Total Taxable Income 43,000
Tax on Taxable Income 5,522
Medical Levy 860
Franking Credits 2100
Total Tax Payable 4228
3

Q21
Calculate Karl’s net capital gain/loss for the 2017/18 tax year.
Calculate Karl’s Taxable Income for the year 2017/2018
Calculation of Capital Gains
Amount
$
Amount
$
Quality Shares:
Sales Proceeds 18600
Purchase Price 12000
Net Capital Gains 6600
Oil Painting:
Sales Proceeds 5200
Purchase Price 6000
Net Capital Loss -800
Crummy Shares:
Sales Proceeds 2500
Purchase Price 4000
Net Capital Loss -1500
Net Capital Gains 4300
(b)
Prepare a statement calculating Karl’s tax payable/refundable
Calculation of Taxable Income in the books of Karl
for the year 2017/2018
Amount
$
Amount
$
Assessable Income:
Interest from Term Deposit 17200
Interest on Saving Account 350
Australian Source Rental Income:
Gross Rent received 15200
Australian Source Dividend Income:
Franked Dividend 2100
Franking Credits 900
4

Net Capital Gains on Disposal of Shares:
Gain on Sale of Quality Shares 6600
Loss on Sale of Oil Painting -800
Loss on Sale of Crummy shares -1500
Net Capital gains 4300
50%CGT Discount 2150 2150
Total Assessable Income 37900
Allowable Deductions:
Agent Commission 920
Council Rates 1490
Mortgage Interests 7900
Total Allowable Deductions 10310
Total Taxable Income 27590
Tax on Taxable Income 1787.9
Add: Medical Levy 551.8
Less: Franking Credits 900
Total Net Tax Payable 1439.7
5

6