Calculate Elizabeth and Kanes total tax liability (including Medicare).

Their financial situation is as follows:

Elizabeths salary is $170,000 p.a. In addition to this, her employer pays the superannuation guarantee contribution on her behalf.

Kane earns $90,000 salary as well as a taxable allowance of $30,000. His employer pays superannuation guarantee on his salary (but not the taxable allowance). Kane salary sacrifices an additional $12,000 to superannuation.

Kane and Elizabeth both earn rent from a jointly owned investment property of $20,000 p.a. (combined) and have an interest only loan of $150,000 (combined) on this property at an interest rate of 5% p.a.

Elizabeth owns an Australian share portfolio valued at $50,000, paying 4% dividends, which is 70% franked.

Kane owns a cash management account valued at $50,000 paying 5% interest.

Kane has income protection insurance owned personally (non-superannuation) with an annual premium of $3,000 owned and paid by him personally.

Kane has a gross, nominal capital gain of $7,000 from the sale of shares owned for 2 years (this is before any CGT discount).

Elizabeth donated $2,000 to a charity, which is a tax-deductible gift.

Elizabeth and Kane have private hospital insurance cover in place.

Calculate the tax payable for each of Elizabeth and Kane. Your response should include calculations to show:

Assessable income

Deductions

Taxable income

Income tax payable

Medicare levy

Tax offsets

Final income tax payable

Round all figures to the nearest whole dollar.

Use the following table as a guide. You may need to add rows to complete your answer.

Show your workings. Full marks will not be awarded if workings are not provided.

Kane Type answers in this column Elizabeth - Type answers in this column

Income

Salary

Allowance

Other income

Dividends

Imputation credits

Capital gain

Less Exempt Income

Assessable Income

Less: Deductions

Work related expenses

Disallowed deductions

Taxable Income

Income tax payable

Less Tax Offsets

Imputation credit

Income Tax Payable

Plus: Medicare Levy

Plus: Medicare Levy Surcharge

Total Income Tax Payable