Q19.11.15

(Various offsets - refundable and non-refundable tax offsets)

Meghan Royal, is a resident taxpayer aged 57, had the following transactions for the 2017/18 tax year:

RECEIPTS

Income Stream Benefit from a taxed superannuation fund

(no PAYG tax was withheld)

$ 17,000

Gross Wages (PAYG tax withheld $1,500)

22,000

Fully Franked Dividends

4,900

PAYMENTS

Private Health Insurance (reduced premium not taken)

3,000

Meghan did not have any deductions.

Meghan also wholly maintained her father Phillip for the whole year. Phillip did not have any adjusted taxable income and was not eligible for any government pensions.

Required:

a.Calculate Meghan's taxable income and

Particular

Amount $

Amount $

Income stream benefit from taxed superannuation fund

$17000

Gross wages

$22000

Fully franking dividends

$7000

Total taxable income

$46,000

b.Net tax payable for the 2017/18 tax year.

Taxable income is $46,000

Tax on taxable income = 3,572 + 32.5% * ($46,000- 37,000) = 6,497

Add : Medicare levy= 2% *$46,000 = 920

Less : superannuation tax offset = 2,550

Less : Privet health insurance tax offset = 3000 * 25.934% = 778.02

Less : Franking tax offset = 2100

Less :PAYG tax withheld = $1,500

Less : low tax income offset = 445 - (1.5%* (46,000-37,000)) = 310

Net tax payable = 1218.02

Working on Lump sum tax offset :

Tax on taxable income = 3,572 + 32.5% * ($46,000 - 37,000) = 6,497

Less : Lump sum tax offset = 15% * 17,000 = 2,550

Total = 3947

Can you check if my working for both parts are right

I am sure part a is right but part b I am not sure if i calculate the Lump sum tax offset however everything in part b is right