Australian Tax Deduction Calculation
Added on 2020-03-23
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TAXATION MAJOR ASSIGNMENTCASE STUDY OF STEFAN FOR YEAR ENDED 30 JUNE 2017Stefan, a Resident of Australia for taxation purposes, works as a Chef and is a singleparent of an 8 year old boy. He owns a 1.6 litre Corolla car, which he uses for travellingto his work place and to TAFE where he is pursuing an advanced course to become afully qualified chef. He has recently purchased a house and also has an IncomeProtection Insurance. Based on the information provided by Stefan, I have prepared hisStatement of Income for the year ended 30 June 2017 and calculated his tax liability tofacilitate him in filing his tax return.CALCULATION OF TAX LIABILITY OF STEFANFOR THE YEAR ENDED 30 JUNE 2017S.No.DatePARTICULARSINCOMEEXPENSESStatute asper ITAA,1997NOTES(All Amounts are in AUS$)01.30 June 17Gross Wages49,000.00s 6-5A02.24 Aug 16Telstra Dividend540.20s 6-5B03.30 Jun 17Family Tax Benefit5,500.00s 6-5C04.14 Feb 17Net Capital Gain fromSale of Telstra shares1,450.00D05.30 Jun 17Self-Education Expenses2,775.00s 6-5E06.30 Jun 17Car Expenses2,610.00s 8-1F07.30 Jun 17Work Cloths & Shoes280.00s 8-1G08.30 Jun 17Professional Tools200.00s 8-1H09.30 Jun 17Income Protection Ins.320.00s 8-1I10.30 Jun 17Interest on Home Loan7,400.00s 8-1J11.30 Jun 17Tax Agent Fee-2016180.00s 8-112.30 Jun 17Superannuation Deposit1,500.00s 8-1TOTALS56,490.2015,265.00Gross Taxable Income41,225.20LESS:Family Tax Benefit5,500.00Telstra Dividend540.20NET Taxable Income35,185.00Gross Tax Payable3,227.15PAYG Payment8,450.00Tax Withheld on Telstra Dividend payment162.00NET REFUND5,384.85
Dear Mr. Stefan,You will found below my Notes which explain the calculations appended with thisletter. These notes are an extension of the explanations given for the various incomesand expenses, as per the information provided by yourself to me. In the appendedcalculations table, you will also find reference to the Tax Statute of the Income TaxAssessment Act of 1997, which becomes applicable to the amount shown in the samerow, as per Barkoczy, (2015).A.Gross WagesThese are the Gross Wages which are received by you from your employer.B.DividendThis is the Fully Franked Dividend amount received by you from Telstra.C.Family Tax BenefitAs per Barkoczy, (2013), the ATO regulations make you eligible for Family Tax Benefit(FTB) Part B which gives extra financial assistance to single parents, since:You have a dependent child, who is below 20 years of age and who does notreceive a pension or a payment or a benefit, including Youth Allowance.You provide care for this child for at least 35% of your time.You meet the income test stipulated by the ATO.D.Capital Gain from Sale of Telstra SharesYou originally purchased 2000 shares of Telstra @ $3.60 per share in September 1995.You were allotted 200 Bonus Shares in March 2008, which shall also be calculated @$3.60 each share. Another 240 shares were purchased by you in January 2009 @ $8.00per share, as per CCH, (2015). Your total acquisition cost calculates to –September 19952,000 shares@$3.60 each$7,200.00March 2008200 Bonus Shares@$3.60 each$720.00January 2009240 shares@$8.00 each$1,920.00Total Acquisition Cost$9,840.0014 February 2017Sale Proceeds of 2440 shares$12,740.00Gross Capital Gain$2,900.00LESS: 50% Discount under Discount Method$1,450.00NET Capital Gain$1,450.00
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