Question

Ryan Small aged 30 and single, provided the following details for the year ended 30 June,...

Ryan Small aged 30 and single, provided the following details for the year ended 30 June, 2017. Ryan derives income from his employment as a bus driver and some investments. Ryan has no private health insurance.

Receipts

Legacy from his uncle's estate

$   3,000

Fully franked dividend from F/S Ltd-amount received

3,300

70% franked dividend from Fl Ltd-amount received

2,900

Unfranked dividend from Back Ltd

1,750

Gross wages (PAYG tax withheld $20,500)

78,800

Bank interest (net of $97 TFN tax withheld)

103

Honorarium for duties as president of the swim club

350

Insurance lump sum compensation (for damage to back sustained in car accident)

12,000

Army Reserve payments for part time services

1,200

Expenses (All fully substantiated)

Purchase of compulsory uniform

480

Laundry of uniform (estimate)

75

Parking fees (Ryan drives his car to the bus depot)

440

Sunglasses used for driving

150

Investment journals

230

Ryan has a HELP liability of $6,600. The repayment rate is 8%.

During the year Ryan received an Australian Government Disaster Recovery Payment.

Required:

  1. Calculate Ryan's taxable income and tax payable for the year ended 30 June 2017.
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Answer #1

Compute net taxable income as follows:

Statement showing taxable income
Particulars Amount
Gross wages $78,800
70% franked dividend $2,900
Honorarium $350
Unfranked dividend from back ltd $1,750
Franking credit (3300 * 30/70) $1,414
Bank interest ( 103 + 97) $200
franking Credit (2900 * 30 / 70 * 30%) $870
Less: Deductions:
Sunglasses used for driving -$75
investment journals -$150
Laundry of uniform -$230
Net taxable income $85,829

Compute tax liability as follows:

Statement showing tax liability
Income tax (17550 + 37% (85829 - 80000) 19706.73
Medicare surcharge (85829 * 1%) 858.29
Medi care levy ((85829 * 1.5%) 1287.43
HELP repayment (lessor of 6600 or 85829 * 8%) 6600
Less:
Franking credits (1414 + 870) -2284
TFN tax deduction -97
PAYG withheld -20500
Tax liability 5571.45

Thus, net tax liability is $ 5571.45.

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