QUESTION13.7 (Businesstaxpayer,repairs,carexpenses) Sybil,aresidentindividualtaxpayeraged29,operatesanantiquestore. Sybiliscoveredbyprivatehealthinsuranceandhasnotelectedtoapply any of the small business entity concessions. The following data relates tothe2O21/22tax year:
Question:
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.