An existing client of many years provides the following information for you to complete their current tax return.

An existing client of many years provides the following information for you to complete their current tax return.

Submit the completed return in a manner that would be accepted by the taxation office – an electronic or hard copy return.

Your assessor can order the necessary forms from the taxation office.

Income

Employer:

ABC Imports

Gross salary:

$87,500

Allowances:

Allowance for company logo clothing $1,250

Interest from term deposit A/C #123456:

$400

Tax withheld:

$20,325

Allowable work deductions

$7,450 (receipts and log book supplied)

Union fees

$450

Dry cleaning of work clothing

$150

Non-working spouse and no children.

Private health membership was cancelled on July 1st of the income year.

Use the table and the information provided to calculate the taxpayer’s taxable income and the liability for income tax.

For this exercise, use the indicated tax rates, not those that are current. The point of this assessment exercise is to show that you can correctly process a return and the currency of the applied figures is not relevant. These figures are examples to be used for this activity and will not necessarily be accurate in terms of current ATO requirements.

Assume the full allowance for company logo clothing has been spent and can be supported with tax receipts.

Taxable income

Tax on this income

0 – $18,200

Nil

$18,201 – $37,000

19c for each $1 over $18,200

$37,001 – $80,000

$3,572 plus 32.5c for each $1 over $37,000

$80,001 – $180,000

$17,547 plus 37c for each $1 over $80,000

$180,001 plus

$54,547 plus 47c for each $1 over $180,001

In this example calculate the Medicare levy at2%, or the Medicare Levy Surcharge at the rate of 1 to 1.5% of taxable income.

Complete the calculation for each tax bracket and round all calculations to the nearest dollar. Do not use the ATO website withholding calculator as that might provide a slightly different figure.

Submit the completed tax return. You must show that you can apply statute, regulation and precedent to a client’s circumstances, develop options to resolve client related taxation matters and plan and sequence your work correctly.

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