Calculate Kim and Stewart’s total tax liability (including Medicare).

Their financial situation is as follows:

• Kim’s salary is $140,000 p.a. In addition to this $140,000, her employer pays 10% employer superannuation on her behalf.
• Stewart earns $90,000 salary as well as a taxable allowance of $30,000. His employer pays superannuation guarantee of 9.5% on his salary (not the taxable allowance). Stewart salary sacrifices to superannuation up to an amount so his total concessional contributions are $25,000. This salary sacrifice contribution reduces his assessable income.
• Stewart and Kim both earn rent from a jointly owned investment property of $15,000 p.a. (combined) and have an interest only loan of $100,000 (combined) on this property at an interest rate of 5% p.a.
• Kim owns an Australian share portfolio valued at $50,000, paying 4% dividends, which is 70% franked (imputation credits attached).
• Stewart owns a cash management account valued at $50,000 paying 5% interest.
• Stewart has income protection insurance owned personally (non-superannuation) with an annual premium of $2,500 owned and paid by him personally.
• Stewart has a gross nominal $6,000 capital gain from the sale of shares owned for 2 years (this is before any CGT discount).
• Kim donated $1,500 to a charity, which is a tax-deductible gift.
• Kim and Stewart have private hospital insurance cover in place.

Calculate the tax payable for each of Kim and Stewart using the table below as a guide.

Round all figures to the nearest whole dollar.

Your response should include calculations to show:

• Assessable income
• Deductions
• Taxable income
• Income tax payable
• Medicare levy
• Tax offsets
• Final income tax payable

Use the following table as a guide. You may need to add rows to complete your answer.

Show your workings. Full marks will not be awarded if workings are not provided.

	Stewart	Kim
Income
Salary
Allowance
Other income
Dividends
Imputation credits
Capital gain
Less Exempt Income
Assessable Income
Less: Deductions
Work related expenses
Disallowed deductions
Taxable Income
Income tax payable
Less Tax Offsets
Imputation credit
Income Tax Payable
Plus: Medicare Levy
Plus: Medicare Levy Surcharge
Total Income Tax Payable