Jeremy is 50 years old, and a resident of Australia for tax purposes. He has provided you
Question:
Jeremy is 50 years old, and a resident of Australia for tax purposes. He has provided you with the following information relating to the 2020 income tax year.
Income from partnership
Jeremy is carrying on a business in a partnership with Anna. The partners share losses and profits equally. The partnership agreement also allows the partners to draw a salary if the partners so agreed. It was agreed at the start of the 2020 income tax year that Jeremy would draw a salary of $20,000 for managing the business and that the balance of profits and losses would be shared equally. Between 1 July 2019 and 30 June 2020, the partnership records show the following
- Sales (excluding GST) $90,000
- Jeremy’s salary $20,000
- Other deductible expenses (excluding GST) $10,000
Other income
- Income from part time job $55,000
- Fully franked dividend from ABC Pty Ltd (ABC Pty Ltd is a base rate entity) $1,000
- Unfranked dividend from XYZ Pty Ltd (XYZ Pty Ltd is not a base rate entity) $2,000
- Net capital gain on sale of main residence on 5 February 2020 $140,000
Deductions
- work-related expenses of $275.
Additional information
Jeremy has also advised that:
- He has private hospital cover.
- His current HECS debt is $15,000.
- PAYG withholding tax installments of $25,000 have been deducted from his salary.
Required
Calculate Jeremy’s taxable income, and tax payable or refundable for the 2020 income tax year.
Expert Answer:
Jermys Salary in Business 20000 Add Income of part time job 55000 75000 Add Unfranked d... View the full answer
