Question
a) Pipy works as an architect. Her employer provides her a free accommodation on the condition that she can only live there by herself and
a) Pipy works as an architect. Her employer provides her a free accommodation on the condition that she can only live there by herself and cannot sublet it to others. The same accommodation costs around $60,000 a year. Is this assessable income of Pipy assume no Fringe benefit tax has been paid by the employer? Explain your answer.
b) Mac operates a petrol station. He enters into an agreement with BP and agreeing to sell BP’s petrol exclusively for 6 years. During these 6 years he cannot sell petrol from any other petrol suppliers. He is paid for $25,000 for signing this agreement with BP. Is it assessable income of Mac? Explain your answer.
c) Betty is a resident JP employed by Bex Ltd. The following transactions were all because of Betty’s employment:
- Net weekly wages totalled $88,000 for the year.
- Total PAYG tax withheld from weekly wages from Bex and forwarded to the ATO $20,000.
- Additional wages paid as a Christmas bonus of $16,000 (net of $6,000 PAYG tax withheld)
- Reimbursement of out-of-pocket travel cost of $1,100 incurred during employment.
- A travel allowance totalling $2,100. No PAYG was withheld.
- Bex paid health insurance premium for Betty and her husband of $3,550
- Superannuation contributed $15,000 to Bex Super Fund on behalf of Betty.
For each of the transactions indicate which amounts are to be included in Betty’s assessable income.
- A taxpayer’s assessable income will include any ‘ordinary income’ and statutory income. Are the following items being assessable income or not and explain your answer
- Salary and a performance bonus received by an employee. Q3 :
d) Wilson is a single resident taxpayer, had a taxable income of $65,500. PAYG tax withheld from Wilson’s gross wages was $9,000.
Note that ~ Taxpayers, who earn over $26,668/year, pay a Medicare Levy of 2% of their taxable income.
Required:
Calculate Wilson’s tax payable or refund for 2020/2021.
Taxable Income
Tax on This Income
0 to $18,200
Nil
$18,201 to $37,000
19c for each $1 over $18,200
$37,001 to $80,000
$3,572 plus 32.5c for each $1 over $37,000
$80,001 to $180,000
$17,547 plus 37c for each $1 over $80,000
$180,001 and over
$54,547 plus 47c for each $1 over $180,000
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