Question
Matt, a resident Australian taxpayer, is employed as a doctor working in an emergency department at a hospital in Wollongong. He recently moved into a
Matt, a resident Australian taxpayer, is employed as a doctor working in an emergency department at a hospital in Wollongong. He recently moved into a house that he rents at a cost of $700 per week. He was required to pay a bond of $4,200 and an electricity and gas connection fee of $300.
On 1 September 2021, Matt started a 12-month online Paediatric Emergencies course which would provide him with extra knowledge to be able to specialise in treating medical emergencies in children. When he started the course Matt leased a new laptop for which he kept a record of usage during the year. Based on this record the laptop was used 75% for his study and the balance for private use. Matt estimates that his home internet usage is the same study-related percentage as his laptop.
Matt also has a mobile phone that he has had for the full year and uses for work purposes. As he is often on-call and needs to be available to answer questions regarding patients during and after hours, his phone records indicate a work-related percentage of 60%.
During the year ended 30 June 2023, Matt had records of the following receipts and payments:
Grosssalaryfrom the hospital(PAYGwithheld$35,000) | $125,000 |
Travel allowance from the hospital | $2,000 |
Intereston bank term deposit | $320 |
FullyfrankeddividendfromCommonwealth Bank | $3,100 |
Medical Board of Australia registration fees | $880 |
Australian Medical Association fees | $500 |
AirfaresSydney to Perthreturntoattenda three-day medical conference | $950 |
TaxifaresfromPerthairportto the hotel and return to the airport | $120 |
Parking fees at Sydney airport where he left his car to fly to Perth | $200 |
Accommodation in Perth for the conference (50% of this was reimbursed by the hospital) | $1,400 |
EnrolmentfeesforonlinePaediatric Emergencies course(12-monthcourse) | $1,500 |
Laptopleasepaymentpermonth | $130 |
Mobilephonemonthlypayment | $110 |
Internetconnectionmonthlyfee | $80 |
Purchaseofshirts and pants toweartowork | $600 |
Purchaseof non-slip, fully enclosed leather shoes he only wears to work | $160 |
Annualtrainfares totravel fromhome toworkdaily (returnfares) | $1,460 |
FuelcosttoattendaworkshopforhisPaediatrics course(400kmroundtrip) | $50 |
Purchase of new stethoscope (15 May 2023) | $290 |
Required:
Assume you are the Tax Agent for Matt, and he has provided you with the above information during his annual interview for the preparation of his 2023 income tax return.
- Withreferenceto relevantlegalauthority,calculateMatt'staxableincomefortheyearended30 June 2023. You should include workings where applicable and details of why amounts areincludedorexcludedfromthecalculation.Also,adviseofanyadditional informationorclarificationyouwouldhaveobtainedfromMatttoensurethe accuracy of the taxable income. (10 marks)
- AssumethatMattissingle,hasadequateprivatehospitalinsuranceandnodependants. Calculate his income tax payable or refundable for the year ended 30 June 2023. (5 marks)
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