Assignment: Australia Taxation
Since 2011 Anita is working for a Law firm located in south Melbourne. She started her career as an assistant. Her initial salary package was $65,000. In 2014 she got promoted and received a salary rise. As it is the tax time she is organising all her required documents for an upcoming meeting with her tax agent. Anita has collected evidences for the following items for 2014/15 financial year:
PAYG summary of $80,000
Entertainment allowance $10,000
Travel allowance $5,000
Telephone allowance $750
Reimbursement of accommodation expenses $8,000
A holiday bonus of $1,000 from her employer
Dividend income $5000
Income from a charitable organisation $500
Anita also has a one-bedroom apartment in Richmond that she has rented out for $1,200 a month to a friend. She has kept all the monthly receipts for 48 weeks.
In August 2014, Anita's friend Kamini organised a cultural program where Anita played flute (on request) for an hour. Unexpectedly Anita received $200 from Kamini for her performance. Kamini booked Anita for next five events scheduled in 2014/15. Anita earned $1000 from these five events.
As per her bank statement she has also earned $500 interest from a term deposit of $50,000 that she has with ANZ bank.
On 12/08/2014 Anita sold one of her artworks (Anita likes to collect artwork) for $3,500 which she bought in 2005 for $750 from an antique shop.
On 20/03/2015 Anita sold another piece of artwork for $1200. She purchased it for $295 from a local "Trash and Treasure" market in 2011.
During the year she has incurred the following expenses:
$1500 on a new suit to impress her clients;
Travel expenses of $4500 for travel between client's premises;
Travel expenses of $2000 from home to work;
Cost of managing tax affairs $150
Anita has spent $3,000 to replace the carpet for her rental property
Anita is considering changing her career and thus enrolled herself to the CPA Program which has costs her $1,450.
Donation made to an educational institution (not DGR listed) $500
Total Tax Withheld by the employer was $26,500
Brokerage fees of $520 incurred in relation to share trading on the margin loan account with the stockbroker (taxpayer is a long-term investor)
Interest expenses of $2500 incurred on a margin loan account used to buy/sell income producing Australian shares.
Bonus from the employer. Employer paid directly to Salvation Army (DGR listed) at the request of the Anita $600
Child care expense $5000
(a) Calculate total Assessable Income for Anita for the year 2014-2015 using the above given information. Discuss each category of income that Anita needs to consider to calculate her assessable income.
(b) Calculate total Taxable Income for Anita for year 2014-2015. Explain the steps in detail. Support your answer with proper reasoning.
(c) Apply the relevant tax rate to calculate Anita's actual tax payable/refund (including Medicare levy and surcharge if applicable) for the year 2014-2015. Show all the steps required to calculate her tax payable/refund amount.