Scenario: Ms Gillian is an existing client of many years provides this information for you to complete their current tax return (Australia).

Income

Use the table and the information provided for 201516 to calculate the taxpayers taxable income and the liability for income tax. Provide reasons for your treatment.

These rates do not include the Medicare levy of 2%, or the Medicare Levy Surcharge which is calculated at the rate of 1 to 1.5% of taxable income. Complete the calculation for each tax bracket and round all calculations to the nearest dollar. Do not use the ATO website withholding calculator as that might provide a slightly different figure.

These rates do not include the Medicare levy of 2%, or the Medicare Levy Surcharge which is calculated at the rate of 1 to 1.5% of taxable income. Complete the calculation for each tax bracket and round all calculations to the nearest dollar. Do not use the ATO website withholding calculator as that might provide a slightly different figure.

These figures are only examples to be used for this activity and will not necessarily be accurate in terms of current ATO requirements.

QUESTIONS

1. Conduct research and discuss various components of the return

2. Prepare the tax return

Employer: Gross salary Allowances ABC Imports $87,500 Allowance for company logo clothing $1,250 $400 $20,325 $7,450 (receipts and log book supplied) Interest from term deposit A/C #123456 Tax withheld Allowable work deductions Union fees Drycleaning of work clothing Non-working spouse and no childrern Private health membership was cancelled on July 1st of the income year $450 $150 Taxable income 0-$18,200 $18,201 - $37,000 $37,001 $80,000 $80,001 $180,000 $180,001 plus Tax on this income Nil 19c for each $1 over $18,200 $3,572 plus 32.5c for each $1 over $37,000 $17,547 plus 37c for each $1 over $80,000 $54,547 plus 47c for each $1 over $180,001