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# Taxation Sample Assignment

## Answer to Question 1

a)

 Calculation of the Income Tax Payable for resident Individual for the year ended 30 June Particulars Amount Taxable Income \$15,000.00 Tax on Taxable Income for first \$18200 Nil Income Tax Payable Nil

The taxable income is less than \$18200 so the tax payable is Nil.

b)

 Income Tax Payable for nonresident Individual for the year ended 30 June Particulars Amount Taxable Income \$15,000.00 Tax on Taxable Income for first \$87000 (32.5%) \$4,875.00 Income Tax Payable \$4,875.00

c)

 Income Tax Payable for Australian Company for the year ended 30 June Particulars Amount Taxable Income \$15,000.00 Tax on Taxable Income Tax rate @30% \$4,500.00 Income Tax Payable \$4,500.00

d)

 Income Tax Payable for resident Individual for the year ended 30 June Particulars Amount Taxable Income \$155,000.00 Tax on Taxable Income From \$87001 to \$180000 @37% \$44,982.00 Income Tax Payable \$44,982.00

e)

 Income Tax Payable for nonresident Individual for the year ended 30 June Particulars Amount Taxable Income \$155,000.00 Tax on Taxable Income 28275+ (155000-87000)*37% \$53,435.00 Income Tax Payable \$53,435.00

f)

 Income Tax Payable for Australian Company for the year ended 30 June Particulars Amount Taxable Income \$155,000.00 Tax on Taxable Income 155000*30% \$46,500.00 Income Tax Payable \$46,500.00

g)

 Income Tax Payable for resident Individual for the year ended 30 June Particulars Amount Taxable Income \$255,000.00 Tax on Taxable Income 62685+(255000-180000)*45% \$96,435.00 Income Tax Payable \$96,435.00

h)

 Income Tax Payable for nonresident Individual for the year ended 30 June Particulars Amount Taxable Income \$255,000.00 Tax on Taxable Income 62685+(255000-180000)*45% \$96,435.00 Income Tax Payable \$96,435.00

i)

 Income Tax Payable for Australian Company for the year ended 30 June Particulars Amount Taxable Income \$255,000.00 Tax on Taxable Income 255000*30% \$76,500.00 Income Tax Payable \$76,500.00

j)

 Income Tax Payable for Australian Company for the year ended 30 June Particulars Amount Taxable Income \$100.00 Tax on Taxable Income 100*27.5% \$27.50 Income Tax Payable \$27.50

In case of small business, the tax rate is 27.5%.

## Answer to Question 2

a)

 Medicare Levy and Medicare Levy Surcharge for the year ended 30 June 2017 Particulars Amount Taxable Income \$18,000.00 Medicare Levy @2% \$360.00 Medicare Levy Surcharge @ 0% Nil

b)

 Medicare Levy and Medicare Levy Surcharge for the year ended 30 June 2017 Particulars Amount Taxable Income \$32,000.00 Less: Senior Tax offset \$2,230.00 Taxable Income after tax offset \$29,770.00 Medicare Levy @2% \$595.40 Medicare Levy Surcharge @ 0% Nil

C)

 Medicare Levy and Medicare Levy Surcharge for the year ended 30 June 2017 Particulars Amount Taxable Income \$45,000.00 Medicare Levy @2% \$900.00 Medicare Levy Surcharge @ 0% Nil

d)

 Medicare Levy and Medicare Levy Surcharge for the year ended 30 June 2017 Particulars Amount Taxable Income \$45,000.00 Medicare Levy @2% \$900.00 Medicare Levy Surcharge @ 0% Nil

In case of Australian resident the Medicare levy Surcharge is only applicable.

e)

In case of companies the Medicare Levy and Medicare Levy surcharge is not applicable.

f)

 Medicare Levy and Medicare Levy Surcharge for the year ended 30 June 2017 Particulars Amount Taxable Income \$110,000.00 Medicare Levy @2% \$2,200.00 Medicare Levy Surcharge @ 0% Nil

In an individual have private health insurance cover then Medicare Levy Surcharge is not applicable.

g)

 Medicare Levy and Medicare Levy Surcharge for the year ended 30 June 2017 Particulars Amount Taxable Income \$110,000.00 Medicare Levy @2% \$2,200.00 Medicare Levy Surcharge @ 1.25% \$1,375.00

h)

 Medicare Levy and Medicare Levy Surcharge for the year ended 30 June 2017 Particulars Amount Taxable Income \$150,000 Medicare Levy @2% \$3,000 Medicare Levy Surcharge @ 1.5% \$1,695

In case an individual has private health cover for part of the year then for the remaining part of the year the individual is required to pay Medicate Levy Surcharge.

i)

 Medicare Levy and Medicare Levy Surcharge for the year ended 30 June 2017 Particulars Amount Taxable income of Victor \$110,000.00 Taxable income of Jackie \$75,000.00 Taxable Income \$185,000 Medicare Levy @2% \$3,700 Medicare Levy Surcharge @ 1.5% \$1,850

The income threshold limit for family is \$180000.

j)

 Medicare Levy Surcharge threshold for the year ended 30 June 2017 Particulars Amount Family threshold \$180,000.00 For dependent children after first one \$4,500.00 Minimum Medicare levy threshold limit \$184,500.00

The family threshold is increased by \$1500 for each dependent children above the first child.

## Answer to Question 3

 calculation of Income tax Payable or refundable Particulars Amount Amount Salary \$32,000.00 Bank Interest \$150.00 Assessable 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 Withheld amount -\$2,600.00 Income Tax payable/ (refundable) \$599.00

It is assumed that the salary is gross amount. The low income tax offset is not required to be shown in calculation.

#### Answer to Question 4

 calculation of Income tax Payable or refundable Particulars Amount Amount Gross Salary \$68,000.00 Fully Franked dividend (net) \$2,000.00 Franking Credit \$857.14 Franked Dividend Gross \$2,857.14 Unranked 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

### Bibliography

Braithwaite, V. (Ed.). (2017). Taxing democracy: Understanding tax avoidance and evasion. Routledge.

Gitman, L. J., Juchau, R., & Flanagan, J. (2015). Principles of managerial finance. Pearson Higher Education AU.

James, S., Sawyer, A., & Wallschutzky, I. (2015). Tax simplification: A review of initiatives in Australia, New Zealand and the United Kingdom. eJournal of Tax Research, 13(1), 280.

Saad, N. (2014). Tax knowledge, tax complexity and tax compliance: Taxpayers’ view. Procedia-Social and Behavioral Sciences, 109, 1069-1075.