income taxation quiz

From the following you are required to calculate Harvey's: 1) taxable income (if any) for the income year ended 30 June 2021, giving brief reasons to support your calculation (20 marks); and 2) income tax liability or refund for that income year (5 marks). Harvey is an Australian resident adult individual. As a boy he rode horses and enjoyed Polo, but an unfortunate fall dashed his hopes of being an Olympian. Harvey still keeps a keen interest in the equestrian field. He studied a Bachelor of Wine Science, and then completed an MBA, but found that jobs in wine science were few and far between. Harvey shifted his career and after completing various bridging courses has now been employed for 3 years in Adelaide at a mid-tier accounting firm, James Auld & Associates and works predominantly in auditing. He is a senior auditor in the accounting firm and is completing his Graduate Diploma in Chartered Accounting but has never studied taxation. During the income year ended 30 June 2021, Harvey received the following amounts: 1 Salary totalling $62,000 from James Auld & Associates from which $15,000 Pay As You Go tax instalments were withheld. Wages for refereeing Polo matches totalling $4,000 from Adelaide Equestrian Club from which $1,000 Pay As You Go tax instalments were withheld. In order to receive the refereeing wages it was a condition of employment that Harvey be a member of the Adelaide Equestrian Club. In addition, Harvey also received $1,000 from private tuition fees teaching polo to club members. 2. Interest totalling $2,000 derived and paid into a cash management bank account held by Harvey with the National Australia Bank Ltd. 3. Net dividends received of $2,100 paid to Harvey in respect of his BHP Billiton shares (an ASX listed company). The dividends were fully franked. 4 . Rent received of $15,000 from his rental property. During the income year ended 30 June 2021, Harvey paid and incurred the following outgoings and has kept "written evidence" for each of them: 1 . It is an expectation of James Auld & Associates partners, that Harvey become a Chartered Accountant Professional, which requires him to complete the Graduate Diploma in Accounting. The costs incurred were $950 paid to study the Financial Accounting & Reporting subject in semester one and $950 to study the Taxation subject in semester two which is commencing in July 2021. 2. Annual Membership fees of $100 to the Adelaide Equestrian Club and $570 to the Institute of Chartered Accountants. 3. Cost of purchasing two suits for $1,000 and associated dry-cleaning of suits of $500 required to maintain a professional image. Cost of safety boots of $150 purchased as a requirement to undertake audit duties in various hardhat construction clients' working environments. 4 Payments totalling $10,000 for interest on a loan of $300,000 that had been used by Harvey to fund his purchase of the rental property. 5. Cost of $2,500 for a new hot water system in Harvey's rental property, which includes installation. 6. Cost of $4,000 for a relative's medical expenses