Core Income Tax Assessment Act 1997 provisions - Assessable Income, Deductions, Taxable Income, Tax Liability, and Tax Offsets.

Jesse is 18 years old and recently graduated from high school scoring, having scored highly in his ATAR results. However, Jesse chooses not to enroll in University.

All of Jesses uncles have businesses in the building and construction industry, in concreting, brick laying, carpentry, plastering, electrical and plumbing. Jesse decides to take up a carpentry apprenticeship with his Uncle Jack and begins his apprenticeship on 1 December 2018.

Several months later Jesse decides to end his apprenticeship and enroll in a civil engineering course at University as a part-time student. Jesse has savings in his bank account and chooses to pay his Student Contribution fees upfront to take advantage of the 10% discount. His discounted Student Contribution payment for part-time study for the year is $3,945.60.

Jesse earns wages of $21,308 from his apprenticeship, no PAYG tax instalments were withheld from this amount. Uncle Jack was extremely pleased that Jesse had come to work for his business that he gave him a bonus of $5,000 as a reward for Jesses hard work over the past 7 months. Jesse had minimum work expenses associated with his work requirements amounting only to $290.

When Jesse was still at high school he worked on Thursday nights, Saturdays, Sundays and school holidays at Bunnings Warehouse from July 2018 to December 2018. He earnt wages of $10,484, and his employer withheld PAYG instalments of $222. Jesses bank account was credited with interest of $421 on December 1 2018.

Required

Answer the following questions about Jesse and his taxation obligations for the 2018-19 income year.

(1)Is Jesse a taxpayer entity? (Refer to the appropriate section of the Income Tax Assessment Act 1997 (ITAA 1997))

(2)How is Jesses taxable income calculated? (Refer to the appropriate section of the ITAA 1997)

(3)Which sections of the ITAA 1997 determine whether the receipts received by Jesse are assessable? What is Jesses assessable income?

(4)Which section of the 1997 Act determines whether the expenses incurred by Jesse are deductible? Are Jesses expenses deductible?

(5)What is Jesses taxable income?

(6)What law imposes a tax and how does this differ to the Income Tax Assessment Acts?

(7)What is Jesses tax liability in relation to the taxable income?

(8)Is Jesse entitled to any taxation credits to reduce this liability?

(9)Will Jesse receive a refund or have a tax payable after he lodges his tax return?

(10) If Jesse didnt pay his fees upfront, could Jesse pay off his debt through the taxation system?