QUESTION13.7 (Businesstaxpayer,repairs,carexpenses)

Sybil,aresidentindividualtaxpayeraged29,operatesanantiquestore. Sybiliscoveredbyprivatehealthinsuranceandhasnotelectedtoapply any of the small business entity concessions. The following data relates tothe2O21/22tax year:

RECEIPTS

Sales(allcash)

PAYMENTS

Purchase of Trading Stock Wages note 1

RefundstoCustomers

MobilePhoneusage(80%business)

Repairsnote2

Car Expenses note 3 Drawings

Rent(includesSybil'sresidencewhichoccupies25%of the property)

PAYGtaxinstalments

OtherExpenses(alldeductible)

NOTEIWAGES

$375,OOO

W2,OOO 35,000

3,400

600l6,OOO9,200

42,000

55,000

15,800

22,OOO

Thewagesincludedan amountof$25,000paidbySybiltoherhusband. Hewas neitherinvolvednorinterestedinherbusinessandonIyworked5hoursperweekwhileSybilplayedcardsonThursdays.TheCommissionerhasindicatedthat

$7,000wouldbereasonableunderthecircumstances.

NOTE2-REPAIRS

Duringtheyear,Sybilspentthefollowingamountsonrepairs:

LandscapingatFrontofShop(31October2021)

RepaintShop (1March2022)

RepairofCustomer'sClothing(tornbybrokenfitting)

InstallationofConcreteRamp(31March2022}

NOTE3MOTORVEHICLEEXPENSES

$3,200

2,700

100

10,000

16,000

Sybil leased a Toyota Echo for the duration of the year. The vehicle had a market value of $18,000 at the commencement of the lease. Sybil maintained a validlogbook showing business use of 40%.She travelled a total of12,000 kilometresduring the year. Her car expenses were as follows:

LeasePayments			$ 4,800
Fines			SOO
Petrol,Registration,andInsurance			3,5oo
CarWashes			400
			9,200
OTHERBALANCES	30June2021	30	June2O22
Creditors(tradingstock)	$15,000		$13,200
StockonHand	46,000		49,500

• DeclineinValuedeductionamountedto$17,000.
• Duringtheyear,Sybiltook$8,000ofstockforherownuse.

CalculateSybil'staxableincomeandnettaxpayableforthe2021/22 tax year.

Answer rating: 100% (QA)

To calculate Sybils taxable income and net tax payable for the 202122 tax year we need to consider t... View the full answer