Answer:
Answer to question 2.1: Income from Various Sources
| Computation of Selena Income | |
| For the year ended 14/15 | |
| Particulars | Amt ($) |
| Assessable Income | 53000 |
| Fully franked dividend (70%) | 9800 |
| Franking credit (30%) | 4200.00 |
| Gross value of fully franked dividend | 14000.00 |
| Interest | 963.00 |
| Unranked Dividend | 900.00 |
| Total taxable income | 72100.00 |
| Taxable Income | 14979.5 |
| Franking credit (30%) | -4200 |
| Total Tax Payable | 10779.50 |
Answer to question 2.26: Taxable Income from Business and Rental Property
| Calculation of Taxable income and Tax Payable | ||
| Particulars | Amount | Amount |
| Income from Business | ||
| Cash Sales | $ 15,000.00 | |
| Credit Sales (Note 1) | $ 1,80,500.00 | |
| Volume rebate received from supplier | $ 3,000.00 | |
| Total Income from business | $ 1,98,500.00 | |
| Income from Rent | ||
| Rental Income (Note 2) | $ 12,700.00 | |
| Total Income from Rent | $ 12,700.00 | |
| Other Income | ||
| Insurance for loss of income | $ 7,000.00 | |
| Total other income | $ 7,000.00 | |
| Total Assessable Income | $ 2,11,200.00 | |
| Allowable deductions | ||
| Deduction from business and rental property | $ 1,32,000.00 | |
| Total Taxable Income | $ 79,200.00 | |
| Tax Payable | ||
| Tax on Taxable Income (3572+(79200-37000)*32.5%) | $ 17,287.00 | |
| Medicare Levy @ 2% | $ 345.74 | |
| Total Tax Payable | $ 17,632.74 | |
| Note: | ||||||||||||||||||||||||
| The Medicare Levy surcharge is not applicable as there is private health insurance | ||||||||||||||||||||||||
Private health insurance rebate is allowed tax offset but the insurance premium amount is not provided in the question.
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Answer to question 6.19: Termination, Medical Levy Surcharge Whole of Income Cap
| Calculation of Taxable income and Tax Payable | ||
| Particulars | Amount | Amount |
| Salary (Net) | ₹ 1,20,000.00 | |
| Add: PAYG | ₹ 41,000.00 | |
| Gross Salary | ₹ 1,61,000.00 | |
| Unused Annual Leave (received) | ₹ 6,800.00 | |
| Add: Tax withholding | ₹ 3,200.00 | |
| Gross Un used Annual Leave | ₹ 10,000.00 | |
| Severance Payment | ₹ 1,67,000.00 | |
| Add: PAYG withheld | ₹ 31,255.00 | |
| Gross Severance Payment | ₹ 1,98,255.00 | |
| Taxable Income | ₹ 3,69,255.00 | |
| Tax Payable | ||
| Tax on taxable income (17547+ (369255-80000)*37%) | 124571.35 | |
| Medicare Levy | 2491.427 | |
| Medicare Levy Surcharge | 5678.325 | |
| Total Tax payable | 132741.102 | |
| Reportable Fringe benefit | ₹ 9,300.00 | |
Answer to question 9.1: Car Expenses, Car Cost Limit
| Calculation of deduction available for Car Expenses | |
| For the Tax year 2014-15 | |
| Particulars | Amount |
| Cents per Kilometre method | |
| Rate of cents per kilometre determined under subsection 4 | $ 0.66 |
| Work related Kilometre (Maximum Limit u/s 28-25) | 5000 |
| Deduction Available under Cents per Kilometre method (A) | $ 3,300.00 |
| Original Value Method | |
| Cost of the car | $ 81,270.00 |
| Rate | 12% |
| Deduction Available under 12% original value method (B) | $ 9,752.40 |
| Allowable deduction (Higher of A or B) | $ 9,752.40 |
| Note: |
| The logbook method and the one third of actual expenses method cannot be applied as the details of expenses is not provided in the question. |
Answer to question 1.7: Application of Medicare Levy surcharge for single tax payer
| Taxable Income | Medical levy | Medical levy Surcharge | |
| Garima | 69000 | 1380 | Nil |
| Ian | 99000 | 1980 | 990 |
| Morgan | 92000 | 1980 | 920 |
| Ethan | 115000 | 2300 | 1437.5 |
| Reg | 83000 | 1660 | Nil |
| Tyrone | 183000 | 3660 | 2745 |
Answer to question 1.8: Principles of Medicare Levy Surcharge for a Family:
| Computation of Samantha and Kristian’s total income | |||
| A | Samantha total income | 165000 | |
| Kristian’s Total Income | 17000 | ||
| Total Income | 182000 | ||
| B | Samantha total income | 165000 | |
| Kristian’s Total Income | 17000 | ||
| Total Income | 182000 | ||
| Medicare Liability | 3300 | ||
| Medicare liability surcharge | 1820 | ||
| C | Kristian’s Taxable Income | 17000 | |
| Add: Fringe benefit | 5000 | ||
| Total Income | 22000 | ||
| Medicare Levy | 110.4 | ||
| Medicare Levy Surcharge | 1870 | ||
| D | Kristian’s Taxable Income | 21000 | |
| Medicare Levy | 10.4 | ||
| Medicare Levy Surcharge | 1860 | ||
| E | Samantha total income | 165000 | |
| Kristian’s Total Income | 17000 | ||
| Threshold for dependents @1500 | 4500 | ||
| Threshold Limit | 1,80,000 | ||
Answer to question 11.13: Low Cost Assets business taxpayer
| Calculation of allowable deduction for decline in the value of assets | ||||
| For the Tax year 2014-15 using the Prime cost Method | ||||
| Particulars | Assets Cost | Days held/365 | 100%/assets effective life | Depreciation |
| Couch | $ 5,800.00 | 1 | 0.142857143 | $ 828.57 |
| Computer | $ 2,800.00 | 1 | 0.25 | $ 700.00 |
| Laptop | $ 5,200.00 | 0.082191781 | 0.333333333 | $ 142.47 |
| Desk and chair | $ 5,100.00 | 1 | 0.142857143 | $ 728.57 |
| Total Deduction allowable using Prime Method (A) | $ 2,399.61 | |||
| Calculation of allowable deduction for decline in the value of assets | ||||
| For the Tax year 2014-15 using the Diminishing Value Method | ||||
| Particulars | Assets Cost | Days held/365 | 200%/assets effective life | Depreciation |
| Library | $ 3,900.00 | 1 | 0.285714286 | $ 1,114.29 |
| Carpet | $ 7,100.00 | 1 | 0.333333333 | $ 2,366.67 |
| Stereo System | $ 3,300.00 | 1 | 0.25 | $ 825.00 |
| Total Deduction allowable using Diminishing Value Method (B) | $ 4,305.95 | |||
| Calculation of Allowable deduction for decline in value of assets of low value pool | |||
| Particulars | Low value pool | Tax Rate | Depreciation |
| Balance of the pool | $ 1,400.00 | 37.50% | $ 525.00 |
| Wall Unit | $ 800.00 | 18.75% | $ 150.00 |
| Micro wave oven | $ 540.00 | 18.75% | $ 101.25 |
| Total Deduction Allowable for low value assets (C ) | $ 776.25 | ||
| Calculation of Total Allowable deduction for decline in value of assets | |
| Particulars | Amount |
| Total Deduction allowable using Prime Method (A) | $ 2,399.61 |
| Total Deduction allowable using Diminishing Value Method (B) | $ 4,305.95 |
| Total Deduction Allowable for low value assets (C ) | $ 776.25 |
| Total | $ 7,481.81 |
