TAX 101: Taxation Principles Assignment - Semester 1, University Name

This document is a solution to a TAX assignment, focusing on Australian taxation principles. It addresses several questions related to tax calculations, including the Medicare Levy Surcharge (MLS), its applicability to residents, and the thresholds for family income. The assignment covers scenarios where MLS is not applicable, such as for companies and individuals with private health insurance. It also explores the calculation of the MLS based on a daily rate for partial hospital cover. Furthermore, the solution analyzes a case involving a gross salary and the potential for a low-income tax offset, which is automatically provided by the Australian Tax Office. The assignment concludes with a bibliography of relevant sources used in the solution.

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

1TAX
Table of Contents
Answer to Question 1......................................................................................................................2
Answer to Question 2......................................................................................................................6
Answer to Question 3....................................................................................................................10
Answer to Question 4....................................................................................................................11
Bibliography..................................................................................................................................12

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Answer to Question 1
a)
Particulars Amount
Taxable Income $18,000.00
Tax on Taxable Income
for first $18200 Nil
Income Tax Payable Nil
Income Tax Payable for resident Individual
for the year ended 30 June
b)
Particulars Amount
Taxable Income $18,000.00
Tax on Taxable Income
for first $87000 (32.5%) $5,850.00
Income Tax Payable $5,850.00
Income Tax Payable for non resident Individual
for the year ended 30 June
c)

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Particulars Amount
Taxable Income $18,000.00
Tax on Taxable Income
Tax rate @30% $5,400.00
Income Tax Payable $5,400.00
Income Tax Payable for Australian Company
for the year ended 30 June
d)
Particulars Amount
Taxable Income $145,000.00
Tax on Taxable Income
From $87001 to $180000 @37% $41,282.00
Income Tax Payable $41,282.00
Income Tax Payable for resident Individual
for the year ended 30 June

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e)
Particulars Amount
Taxable Income $145,000.00
Tax on Taxable Income
28275+ (145000-87000)*37% $49,735.00
Income Tax Payable $49,735.00
Income Tax Payable for non resident Individual
for the year ended 30 June
f)
Particulars Amount
Taxable Income $145,000.00
Tax on Taxable Income
145000*30% $43,500.00
Income Tax Payable $43,500.00
for the year ended 30 June
Income Tax Payable for Australian Company
g)
Particulars Amount
Taxable Income $265,000.00
Tax on Taxable Income
62685+(265000-180000)*45% $100,935.00
Income Tax Payable $100,935.00
Income Tax Payable for resident Individual
for the year ended 30 June

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h)
Particulars Amount
Taxable Income $265,000.00
Tax on Taxable Income
62685+(265000-180000)*45% $100,935.00
Income Tax Payable $100,935.00
Income Tax Payable for non resident Individual
for the year ended 30 June
i)
Particulars Amount
Taxable Income $265,000.00
Tax on Taxable Income
265000*30% $79,500.00
Income Tax Payable $79,500.00
Income Tax Payable for Australian Company
for the year ended 30 June
j)

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Particulars Amount
Taxable Income $198,000.00
Tax on Taxable Income
265000*27.5% $54,450.00
Income Tax Payable $54,450.00
Income Tax Payable for Australian Company
for the year ended 30 June
Answer to Question 2
a)
Particulars Amount
Taxable Income $21,335.00
Medicare Levy @2% $426.70
Medicare Levy Surcharge @ 0% Nil
Medicare Levy and medicare Levy Surcharge
for the year ended 30 June 2017
b)
Particulars Amount
Taxable Income $31,738.00
Medicare Levy @2% $634.76
Medicare Levy Surcharge @ 0% Nil
Medicare Levy and medicare Levy Surcharge
for the year ended 30 June 2017

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C)
Particulars Amount
Taxable Income $55,000.00
Medicare Levy @2% $1,100.00
Medicare Levy Surcharge @ 0% Nil
for the year ended 30 June 2017
Medicare Levy and medicare Levy Surcharge
d)
Particulars Amount
Taxable Income $185,000.00
Medicare Levy @2% $3,700.00
Medicare Levy Surcharge @ 0% Nil
Medicare Levy and medicare Levy Surcharge
for the year ended 30 June 2017
It should be noted that only in case of Australian Resident the Medicare levy Surcharge is
applicable.
e)
In case of companies the Medicare Levy and Medicare Levy surcharge is not applicable.

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f)
Particulars Amount
Taxable Income $123,800.00
Medicare Levy @2% $2,476.00
Medicare Levy Surcharge @ 0% Nil
Medicare Levy and medicare Levy Surcharge
for the year ended 30 June 2017
It should be noted that if an individual have private health insurance then the Medicare
Levy Surcharge is not applicable.
g)
Particulars Amount
Taxable Income $120,000.00
Medicare Levy @2% $2,400.00
Medicare Levy Surcharge @ 1.25% $1,500.00
Medicare Levy and medicare Levy Surcharge
for the year ended 30 June 2017
h)
Particulars Amount
Taxable Income $160,000
Medicare Levy @2% $3,200
Medicare Levy Surcharge @ 1.5% $1,808
Medicare Levy and medicare Levy Surcharge
for the year ended 30 June 2017

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The Medicare Levy Surcharge is calculated for daily rate so if there is only partial
hospital cover for the financial year then the individual have to pay MLS for remaining part of
the year.
i)
Particulars Amount
Taxable income of Victor $105,000.00
Taxable income of Jackie $85,000.00
Taxable Income $190,000
Medicare Levy @2% $3,800
Medicare Levy Surcharge @ 1.5% $2,147
for the year ended 30 June 2017
Medicare Levy and medicare Levy Surcharge
The threshold limit of the family is $180000.
j)
Particulars Amount
Family thershold $180,000.00
For dependent children after first one $4,500.00
Minimum Medicare levy thershold limit $184,500.00
Medicare Levy and medicare Levy Surcharge
for the year ended 30 June 2017
There is an increase in the family threshold by $1500 above each dependent children
above the first child.

10TAX
Answer to Question 3
Particulars Amount Amount
Salary $32,000.00
Bank Interest $150.00
Assesable Income $32,150.00
Allowable Deduction for clothing $450.00
Taxable Income $31,700.00
Tax on Taxable Income $2,565.00
Medicare levy $634.00
PAYG Withhel amount -$2,600.00
Income Tax payable/ (refundable) $599.00
Calcuation of Income tax Payable or refundable
The salary that have been provided is in the gross figure. The income of Bob is less than
the $66667 so there is a possibility of low income tax offset. The low income tax offset is
provided automatically by the Australia Tax Office.

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Answer to Question 4
Particulars Amount Amount
Gross Salary $68,000.00
Fully Franed dividednd (net) $2,000.00
Franking Credit $857.14
Franked Dividend Gross $2,857.14
Unfranked Dividend $1,000.00
Franked Dividend(60%) $900.00
Franking Credit $239.24
60% franked dividend $1,139.24
Total Taxable Income $72,996.38
Tax On taxable income $15,270.82
Medicare Levy $1,459.93
Franking credit -$1,096.38
PAYG withholding -$15,100.00
Income Tax payable/(Refundable) $534.37
Calcuation of Income tax Payable or refundable