Q5.3.5

(Taxable income from Australian and foreign sources)

Yvette Jankic, a resident single taxpayer aged 31, worked in New Zealand from 1 July 2017 until 15 November 2017 and has provided the following information for the 2017/18 tax year:

Receipts

Interest (net of TFN tax withheld $490) 510

Interest from United Kingdom (net of withholding tax $300) 2,700

Dividend from the U.S. state of Georgia (net of withholding tax $2,100) 3,900

Gross salary Australian employment (PAYG tax $5,285 withheld) 21,000

Reportable fringe benefit as per PAYG Summary 6,252

Net salary New Zealand employment (tax withheld $2,540) 12,650

Bonus from Australian Employer for exceptional performance 2,000

Payments

Interest and Dividend deductions relating to United Kingdom and Georgia investments 250

Work-related deductions relating to Australian employment 300

Note Yvette does not have private health insurance.

Required:

a. Calculate Yvette's taxable income for the 2017/18 tax year.

My working for part a :

Interest (510 + TFN tax withheld $490) = 1000

Interest - United Kingdom (2700 + net of withholding tax $300) = 3000

Dividend - Georgia (3900 + net of withholding tax $2,100) = 6000

Gross Salary - Australia 21,000

Gross Salary - New Zealand (not exempt) (12,650 + tax withheld $2,540) = 15,190

Bonus 2,000

Gross taxable Income = 48,190

Less: Investment Deductions 250

Work-related Deductions 300

Total deduction = 550

TAXABLE INCOME = 47,640

b. Calculate Yvette's net tax payable or refundable for the 2017/18 tax year.

My working for part b :

Taxable income 47,640

Tax on taxable income = 3,572 + 32.5%* (47,640 - 37,000) = 7,030

Add: Medicare levy = 2% * 47,640 =952.8

Less : Low income tax offset = 445 - (1.5% *(47,640 -37,000)) = 285.4

Less: PAYG tax withheld = 5,285

Less : Foreign Income Tax Offset =

Calculation of Foreign Income Tax Offset :

Tax on taxable income 47,640 = 3,572 + 32.5%* (47,640 - 37,000) = 7,030

Tax on taxable income 15,715 = 0+ 19% *(21,000- 18,200 ) = 532

Notes : Please can you check both parts and let me know if we have to add any other Calculation for part b. However part a I used the right format to answer it part a but for part be I didn't complete the answer because I wasn't sure if it the right format or not.

Subject : Prepare tax documentation for individuals 15th edition this questions on chapter 3 and on this question you can refer to chapter 1 as well from page 58-63.