Philippa reports to you the following business income and expenditure of:

• In her first year of business from 1 July 2018 to 30 June 2019 she had $100,000 business income and $130,000 in general expenses.
• In her second year of business from 1 July 2019 to 30 June 2020, she had $200,000 in business income and $130,000 in general expenses.

Philippa also received the following payments:

• She works lecturing at the university on Wednesdays and is paid $10,000 every year from which $3,000 income tax is withheld;
• On 1 September 2019, Philippa joined the army reserve as a captain and earned $50,000 until 30 June 2020. The army reserve pay is exempt income so no tax is withheld.

Required: 

Calculate for Philippa her tax payable for the tax years 2019 and 2020. Take into consideration all income, allowable deductions and any carried forward losses. Make sure your answer includes discussion of the relevant legislation, cases and/or Rulings. 

Answer rating: 100% (QA)

Computation of taxable income of Philippa For the torx year 2019 Particular S Gross business income ... View the full answer