Jenny Jones is a freelance architect and commenced business in August 2009. She operates her business from her home in Jolimont and uses two rooms in the six-room house for work.
Most of her work has been in relation to small clients. In March 2010 Jenny was offered a large consulting job with the Victoria Government worth $150,000. Consequently, in March 2010 Jenny employed Jon Jonson, a recent university graduate, at a cost of $45,000 to help her with the work. Jon
was employed part time on a three-day per week basis. Because of the demands of the government job, it is likely that Jenny will need to take on more support staff or reduce her other private client work.
Taxation Law
LAW301
For the year ending 30 June 2010 Jenny earned the following income:
o $110,000 - cash
o $30,000—amount owing by customers (including the Queensland Government).
Her home and other expenses were:
 Rates: $3,000
 Interest on mortgage: $24,500
 Insurance: $1,250
 Utilities: $4,500
 Salaries: $15,000
 Local advertising: $2,400
 Desk, computers and printers: $12,000
 Car—Toyota Corolla: $24,000 (acquired 1 August 2019). It has travelled 11,000 kilometers of which 60% was work related. Running costs excluding depreciation were $5,800.
1) Determine Jenny’s taxable income for the year ending 30 June 2010.
2) On 15 January 2020 Jenny’s accountant suggested she form a company for her work in order to protect her liability and for advantageous tax reasons.