Objectives
Answer the following questions with reference to the relevant legislative provisions operating in Australia concerning the calculation of income tax. Do not consider the effects of legislation potentially applicable other than that specifically identified.
Assessment Tasks
Question 1 10 Marks
Calculate the income tax payable, ignoring the Medicare levy, for the following taxpayers for the year ended 30 June 2016:
(a) An Australian individual who is a resident with a taxable income of $15,000.
(b) ) An Australian individual who is a non-resident with a taxable income of $15,000.
(c) ) An Australian company with a taxable income of $15,000.
(d) ) An Australian individual who is a resident with a taxable income of $155,000.
(e) ) An Australian individual who is a non-resident with a taxable income of $155,000.
(f) An Australian company with a taxable income of $155,000.
(g) ) An Australian individual who is a resident with a taxable income of $255,000.
(h) ) An Australian individual who is a non-resident with a taxable income of $255,000.
(i) An Australian company with a taxable income of $255,000.
(j) An Australian company qualified as a "small business entity" with a taxable income of $100.
Question 2 10 Marks
Calculate the Medicare levy and Medicare levy surcharge payable for the year ended 30 June 2016 for the following taxpayers:
(a) An Australian resident, aged 25 years, with a taxable income of $18,000.
(b) An Australian resident, eligible for a Seniors tax offset, with a taxable income of $32,000.
(c) An Australian resident, aged 45 years, with a taxable income of $45,000.
(d) A taxpayer who is not a resident for tax purposes, with a taxable income of $45,000.
(e) ) An Australian company with a taxable income of $2,500,000.
(f) An Australian resident, aged 45 years, with a taxable income of $110,000, holding private health insurance.
(g) An Australian resident, aged 45 years, with a taxable income of $110,000, and no private health insurance.
(h) An Australian resident with a taxable income of $150,000, holding private health insurance for 90 days of the income year.
(i) Victor and his wife are Australian residents. Victor has a taxable income of $110,000 and his wife Jackie a taxable income of $75,000. They have no children and no private health insurance.
(j) An Australian couple have four children and no private hospital health insurance. What would be the family's minimum Medicare levy surcharge threshold?
Question 3 10 Marks
You client, Rob, has the following income and deductions for the financial year ended 30 June 2015: salary, $32,000; bank interest received, $150; and allowable deductions for special work clothing, $450. Rob's employer has deducted $2600 as PAYG tax from his salary during the
year.
Calculate Rob's income tax payable or refundable.
Question 4 10 Marks
During the current income year Rafael, a resident taxpayer, has a gross salary of $68,000 (PAYG tax withheld $15,100), a fully franked dividend of $2,000, an unfranked dividend of $1,000, and a 60% franked dividend of $900.
There are no deductions. Calculate Rafael's taxable income and tax payable.
Question 3
- Calculation of Rob's taxable income by applying the statutory formula under s 4-15 ITAA 1997 (2 Marks)
- Calculation of Rob's tax liability per the ITRA 1986 (2 Marks)
- Calculation of the Medicare levy (2 Marks)
- Consideration to Rob's entitlement to any tax offsets and/or tax credits (1 Marks)
- Calculation of income tax payable or refundable by applying the method in s 4-10 ITAA 1997 (3 Marks)
Question 4
- Calculation of Rafael's taxable income by applying the statutory formula under s 4-15 ITAA 1997 (2 Marks)
- Calculation of Rafael's tax liability per the ITRA 1986 (2 Marks)
- Calculation of the Medicare levy (2 Marks)
- Calculation of Rafael's Franking tax offset and PAYG tax withheld (1 Marks)
- Calculation of income tax payable or refundable by applying the method in s 4-10 ITAA 1997 (3 Marks)