Unit: Prepare tax documentation for individuals
CHAN CHUN MAN JOHN
STUDENT ID. NUMBER
RESULT INDIVIDUAL ASSESSMENT RESULT ASSESSMENT ACTIVITY S ¨NS ¨ FINAL RESULT C ¨ NYC ¨
I have received the Assessment Feedback on____________________________ Date:_____________
ASSESSOR SIGNATURE DATE
Version Date Author Comments
26th June 2017
? Editing and inclusion of Assessment Instructions and Assessor Feedback boxes
Format: Prepare a non-complex tax return for an individual referring to the relevant source document. Responding ATO inquiries on behalf of a client.
Students undertaking this assessment must demonstrate competency as per the Training Package or accredited course requirements, guidelines and rules.
Academies Australasia Polytechnic’s VET Programs observes the following grading scheme for the below assessment:
Competency based assessment is a process where an assessor works with you to collect evidence of competence, using the benchmarks provided by the unit standards that comprise the national qualifications.
PREPARE TAX DOCUMENTATION FOR INDIVIDUALS
ASSESSMENT ACTIVITY: PREPARE A NON-COMPLEX TAX RETURN FOR AN INDIVIDUAL
In this assessment task, the assessor will provide the learner with the missing details in the following scenario.Learner will also be provided with a payment summary,a dividend statement and a blank individual tax return (with supplement form) for the current income year.The information will be used to prepare an individual tax return.
The Assessor will provide each learner with a different set of figures to ensure authenticity of the assessment evidence. Please see the requirements for the assessment and assessment criteria below.
Fred Elm is a resident (for tax purposes) who is single and full time employed as a solicitor. During the current income year, he had the following types of income and capital gains.
1. Salary from his employment with INTERNATIONAL LEGAL ADVICE GROUP PTY LTD. Please find the salary and PAYG information on the payment summary.
2. Derived rent of $12,000 from his residential investment property.
3. Fred earned $300 interest on his savings account.
4. Salary from his employment with INTERNATIONAL LEGAL ADVICE GROUP PTY LTD. Please find the salary and PAYG information on the payment summary.
5. Fred owns some shares in Telstra. He received the annual dividend statement for the final dividend paid (please see attached dividend statement). Telstra did not pay interim dividend during the year.
6. Fred is a beneficiary of a family trust and was presently entitled to $11,500 of the income of the trust estate.
7. Fred is entitled to the following deductions:
? 4,000 km work related car expenses (use cents per km method)
? $670(for the cost of a law seminar he attended).
? $400 (for the decline in value of the computer he uses in his study at home for work-related matters).
? $6,500(for repairs to the fence of his investment property)
? $200(for fees charged by his accountant to prepare his previous year's tax return)
? $1,100(Work-related travel expenses)
? $900 Other work-related self-education expenses
? $750 Other work-related expenses
? $110 Gifts or donations
8. Fred is also entitled a franking tax offset of $1,500 for the franking credit relating to the dividend he received.
9.Fred has private health insurance for the whole income year.
10.Fred has $75,000 outstanding HELP debt.
Calculate Fred's income tax liability for the current income year. Prepare the tax calculation statement and individual income tax return document ready for lodgement.
1. The learner is required to calculate income tax liability and related levies payable in the current income year by an individual based on the information provided in the table below and the details provided by the assessor.
2. The learner is required to submit a tax calculation statement (also below) to demonstrate the calculations. Please see the tax calculation statement below.
3. Learner is required to complete the income tax return (including the supplement form) and submit to the assessor via learning management system (LMS), email or hardcopy on the nominated assessment date.
4. Assume as part of the annual audit program, Australian Taxation Office is now reviewing the tax return prepared as part of this assessment task. The learner, who is the nominated tax agent for the individual for the purposes of this task, is required to prepare a response (in the form of an email) to be sent to the ATO (to relevant case officer Ms Ann Young, case number: XY264534) presenting the tax calculation statement for the year and attaching the individual payment summary as well as the dividend statement. Please see the assessment criteria for the email below.
INCOME TAX RETURN AND TAX CALCULATION STATEMENT
TAX RETURN - PAGE 1
Tax File Number 123 456 789
Are you an Australian Resident? Yes
Name Fred Elm
Your postal address 18 Elm Street Doncaster East VIC 3109
Is your home address different from your postal address? No
Your contact details Mobile: 0455 123 123, firstname.lastname@example.org
TAX RETURN - PAGE 2
Will you need to lodge an Australian tax return in the future? Yes
Your date of birth 19 April 1967
Electronic funds transfer (EFT) BSB: 123-001 Account No: 1234567
Account Name: ASMITH
Income: Salary or wages Your main salary and wage occupation: Solicitor
Payer’s Australian business number: 11 222 333 444
Salary (Gross): $155,000
Tax withheld: $46,500
TAX RETURN - PAGE 3
Gross interest Tax file number amounts withheld from gross interest (Label M): Nil
Gross Interest: $300
Dividends Unfranked amount $ NIL
Franked amount $3,500
Franking credit $1,500
Tax file number amounts withheld from dividends (Label V): Nil
TAX RETURN - PAGE 4
Work-related car expenses Use cents per km method. Claim code: S
4,000km business kilometre $2640 of deduction
Work-related travel expenses
Work-related self-education expenses
Other work-related expenses
Gifts or donations
Cost of managing tax affairs
Tax losses of earlier income years Primary production losses carried forward from earlier income years: Nil
Primary production losses claimed this income year: Nil
Non-primary production losses carried forward from earlier income years $__________
Non-primary production losses claimed this income year $__________
TAX RETURN - PAGE 5
Tax Offsets Nil
TAX RETURN - PAGE 6
Did you had any – covered by private patient hospital cover? Yes
Health Insurance Details Health Insurance Details
Health Insurer ID: MBP
Health Insurer Name: MEDIBANK PRIVATE LIMITED
Membership number: 22042065
Start Date: 1st of July
End Date: 30th of June
Type of Policy: A
Government Rebate: $1,090
TAX RETURN - PAGE 8
Income Tests Total reportable fringe benefits
Reportable employer superannuation
TAX RETURN - PAGE 10
Are you required to complete any of the items on the Tax return for individuals (supplementary section) 2016? No
Date & Signature Complete.
TAX CALCULATION STATEMENT
Step 1: Calculate Assessable Income Salary: s.6-5 ITAA97 =
Interest: Salary: s.6-5 ITAA97 =
Rent: s.6-5 ITAA97 =
Net capital gain: s.102-5 ITAA97 =
Dividend: s.44(1) ITAA36 =
Franking credit: s.207-20 ITAA97 =
Trust income: s.97 ITAA36 =
Total assessable income =
Step 2: Calculate Allowable Deductions Motor vehicle expenses:Div. 28-C ITAA97 =
Self-education seminar: s.8-1 ITAA97 =
Computer depreciation: s.40-25 ITAA97 =
Repairs: s.25-10 ITAA97 =
Tax-related expenses: s.25-5 ITAA97 =
Total other s.8-1 ITAA97 =
Total deductions =
Step 3: Calculate taxable income:
Taxable Income =
Step 4: Calculate basic income tax liability by multiplying taxable income by individual tax rates Basic income tax liability =
(Before tax offset)
Step 5: Calculate tax offsets
Franking credit tax offset: s 207-20 ITAA97 =
Step 6: Calculate income tax liability Basic income tax liability =
(After tax offset)
Step 7: Calculate TBRL Calculate TBRL by multiplying so much of taxable income that exceeds $180,000 (i.e. $10,000) by 2% =
Step 8: Calculate Medicare Levy Medicare Levy =
Step 9: Calculate HELP repayment HELP repayment payable =
Step 10: Calculate total income tax, TBRL and Medicare Levy liability, HELP debt Total tax liability =
PAYG Paid =
Net tax liability =
ASSESSMENT CRITERIA FOR TAX RETURN AND CALCULATION STATEMENT
Assessment criteria Item
Satisfactory Non Satisfactory
Step 1: Calculate Assessable Income Salary: s.6-5 ITAA97
Interest: Salary: s.6-5 ITAA97
Rent: s.6-5 ITAA97
Net capital gain: s.102-5 ITAA97
Dividend: s.44(1) ITAA36
Franking credit: s.207-20 ITAA97
Trust income: s.97 ITAA36 =
Total assessable income
Step 2: Calculate Allowable Deductions Motor vehicle expenses: Div. 28-C ITAA97
Self-education seminar: s.8-1 ITAA97
Computer depreciation: s.40-25 ITAA97
Repairs: s.25-10 ITAA97
Tax-related expenses: s.25-5 ITAA97
Step 3: Calculate taxable income: Taxable Income
Step 4: Calculate basic income tax liability by multiplying taxable income by individual tax rates
Basic income tax liability
(Before tax offset)
Step 5: Calculate tax offsets Franking credit tax offset: s 207-20 ITAA97
Step 6: Calculate income tax liability (After tax offset and PAYG)
Step 7: Calculate TBRL Calculate TBRL by multiplying so much of taxable income that exceeds $180,000 (i.e. $10,000) by 2%
Step 8: Calculate Medicare Levy
Step 9: HELP Repayment
Step 10: Calculate total income tax, TBRL and Medicare Levy liability Total tax liability
END OF PAPER