John, single, is a resident for tax purpose. He is your client for many years an
ID: 2391259 • Letter: J
Question
John, single, is a resident for tax purpose. He is your client for many years and
now provides you the following information to complete his 2016-17 individual
tax return.
Income
-Gross salary (from PAYG Summary): $87,500
-Tax withheld (from PAYG Summary): $20,325
-Allowances – Travel (from PAYG Summary): $1,250
-Interest from Term Deposit A/C #123456: $400
Expenses
The following expenses were actually incurred and paid during the year.
-Work-related travel: $1,000
-Union fees: $450
-Dry cleaning of work clothing: $150
-Other work-related expenses with invoices supported: $7,700
Other Information
-Private health fund membership was cancelled on 1 July of the income year.
Resident Tax Rates 2016-17
Taxable income l Tax on this income
0 - $18,200 l Nil
$18,201 - $37,000 l 19c for each $1 over $18,200
$37,001 - $87,000 l $3,572 plus 32.5c for each $1 over $37,000
$87,001 - $180,000 l $19,822 plus 37c for each $1 over $87,000
$180,001 and over l $54,232 plus 45c for each $1 over $180,000
The above rates do not include the Medicare levy of 2% and Temporary Budget
Repair Levy which is payable at a rate of 2% for taxable income over $180,000.
Required:
Use the above 2016-17 tax rate table to calculate the net tax payable or
refundable for John. Undertake your own research from ATO website https://
www.ato.gov.au/ to determine if John is entitled to low income rebate, and
liable for Medicare levy and Medicare levy surcharge, and include the necessary
calculation and/or explanation in your answer. You must show your calculation
step by step and provide reasons for your treatment.
Explanation / Answer
It is main that you complete the man or woman information on pages 1 and 2 of your tax return effectively to avert delaying your notice of assessment. We've got supplied explanations under for the tax-associated items so that you can complete these sections thoroughly.
In case you are now not certain whether you have got to lodge a tax return, see Do you must motel a tax return? 2017
Your tax file number
Your tax file quantity (TFN) is proven in your payment abstract, as good as on your last notice of evaluation. You don't have got to quote your TFN in your tax return, but your assessment could also be delayed if you don't.
In case you are new to the tax process and would not have a TFN, go to ato.Gov.Au/tfn or mobile 13 28 61.
Are you an Australian resident?
You must print X within the sure box if you happen to had been an Australian resident for tax functions for all of 2016-17. If you were not an Australian resident for tax functions for all of 2016-17 print X in the No field.
Mainly, we do not forget you to be an Australian resident for tax functions if:
you have perpetually lived in Australia or you will have come to Australia and reside right here permanently
you might have been in Australia continuously for six months or more, and for many of that time you labored in the one job and lived at the identical situation
you've got been in Australia for greater than six months for the duration of 2016-17, unless your traditional dwelling is abroad and you don't intend to are living in Australia
you go abroad quickly and you don't installed a everlasting house in an additional nation, or
you might be an abroad pupil who has come to Australia to gain knowledge of and are enrolled in a course that's greater than six months long.
If you would like support in determining whether or no longer you're an Australian resident for tax purposes, we've online instruments to support you at figure out your residency status for tax functions.
Has your residency reputation converted?
In case your residency repute for tax purposes converted throughout 2015-16, that's, you were an Australian resident for part of 2016-17, you will have got to reply yes to this question and whole item A2 in your tax return. We want this information to determine your tax-free threshold.
Were you in Australia on a 417 or 462 working vacation visa at any time between 1 January 2017 and 30 June 2017?
In case you have been in Australia on a 417 or 462 working excursion at any time between 1 January 2017 and 30 June 2017, you have got to whole object A4 in your tax return. You have got to whole this item or you can be taxed at a greater tax expense.
Has any part of your identify converted seeing that finishing your final tax return?
To find out the right way to replace your title on our files, go to update your details or phone 13 28 sixty one.
Will you have to lodge an Australian tax return at some point?
This can be your final tax return if:
your annual taxable revenue someday will probably be beneath the tax-free threshold ($18,200 for 2017-18)
your only supply of earnings in the future can be an Australian government pension
you'll turn out to be eligible for the seniors and pensioners tax offset in 2017-18, and your rebate sales is below the brink for lodging a tax return this year (for threshold levels and eligibility for 2016-17, see Do you ought to hotel a tax return? 2017)
you are relocating overseas completely, or
you might be 60 years historic or older and your best source of revenue is from superannuation benefits (both lump sum and sales streams) which have already been discipline to tax in the superannuation fund.
Relying in your quandary, print X within the yes, No or don't know field.
Deceased property
Print:
Deceased property on the highest of web page 1 of the tax return
X within the No field at Will you have to resort an Australian tax return sooner or later?
The executor or administrator of the property need to sign the tax return.
Digital cash transfer (EFT)
Direct refund
we want your monetary school details to pay any refund owing to you, even if you could have offered them to us before. Joint money owed are suitable.
Whole the following:
BSB number (this number has six digits, do not incorporate areas or hyphens)
account quantity (this quantity has not more than 9 digits, do not comprise areas or hyphens)
account name, as it seems on the financial institution account records. Include all blank areas where required. If the account title exceeds 32 characters, complete simplest the first 32 characters.
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