HI6028 Individual Taxation Assignment

Question No 1A

15 Marks

Melissa is a mechanic. She runs her own business specialising in repairing electric vehicles, especially cars. This year her company has some expenses. Referring to relevant provisions of the Income Tax Assessment Act 1997 (Cth), Income Tax Assessment Act 1936 (Cth) and case laws, discuss the following amounts are deductible or not: (Maximum 800 words)

1. She spends travel cast from her home to her repair centre regularly. In this process, she spent a total travel cost of $3,200 this year.
2. A staff who works in the repair centre paid a $1,080 fine for speeding a car that he was driving in the process of servicing and repairing.
3. Legal expenses incurred by a company opposing a petition for winding up. The company paid$11,000 for lawyers and court fees.

Questions 1 B

10 Marks

Suresh is a technician working with Melissa's car repair centre. Due to a dangerous workplace accident, Suresh became seriously i Suresh received compensation of $131,000. The lump sum was divided into $57,000 loss of earnings, $43,000 loss of future earning capacity and $31,000 for pain and suffering Based on legal provisions and case law advise Suresh, will any of these amounts be assessable income?

Furthermore, advise Suresh whether it would be better to accept a lesser sum of $110,000 without any agreed allocation of the funds between current and future earnings and pain and suffering. (Maximum 700 words)

Question No 2

15 Marks

You are working as a staff at Accounting and Tax Services Pty Ltd Sydney. Sharine is your first client. She requires to lodge her income tax for 2021/22. She gave her annual income and deduction below. Calculate her Total Assessable Income, Taxable Income, Tax Liability, Medicare Levy and Medicare Levy Surcharge, if applicable, for the taxpayer (Sharine) with the information below:

• Sharine is a resident single mom with one dependent daughter (3 years old) taxpayer of Australia for the tax year 2021-2022.
• Her Taxable Salary earned is $111,000 (Including tax withheld), having no private health insurance.
• She had a $13,000 deduction.
• Sharine has a student loan outstanding for her study at Sydney University $47,000, an education loan.
• Sharine's employer paid a superannuation guarantee charge of 10% on top of her salary to her nominated fund.
• Sharine earned a passive income of $15,000 from the investment income from her investment property in the same tax year.

Hint: The following website can be used to cross-check your answers, but you need to provide detailed calculations, rates and explanations with screenshots of rates from the ATO website.
https://www.paycalculator.com.au/

Submission guide: Strictly NO excel sheet(s) or screenshots of excel calculations and/or tables are I allowed. Kindly use word document tables for your answers and please avoid writing the calculations in narration format.