QUESTION13.9 (Businesstaxpayer,employeerelatedcosts)

Ian Cognito operates a private investigation business. Ian has notelected to use any of the small business entity concessions. For the 2021/22 tax year, Ian prepared the following revenue statement:

INCOME

GrossFeesnote1 OtherIncomenote2	$337,OOO 41,OOO	$378,OOO
EXPENSES
OfficeExpensesnote3	74,600
PersonnelExpensesnote4	214,000
TravelExpensesnote5	35,000	323,600
NETPROFIT		54,400

• Ianissingleanddoesnothaveprivatehealthinsurance.

NOTEIOTHERINCOME

Dividends(frankingcredits $5,600)

Insurance Recovery for damage to Ian's home Royalties from bookwritten by Ian

Note2-OFFICEEXPENSES

Rent

DeclineinValue(accountingandtaxvalueswerethesame)

Electricity

Telephone(15%ofthiswasforprivateuse) Office AlterationsfoiMarch 2022,effective life20 years)

NOTE3PERSONNELEXPENSES

Net Wages paid to operativesIncrease in Annual Leave Provision Personal Superannuation Contribution (deductible)

17,OOO

14,OOO

1O,OOO 41,OOO

34,OOO

2O,OOO

3,1OO

4,OOO

13,5OO 74,6OO

72,000

9,000

11,OOO

SuperannuationGuaranteeCharge 2,500

FringeBenefitsTaxpaid 4,5OO

PAYG taxwithheld from wages 21,OOODrawings- Iandraws$1,OOOperweekasa 'wage' 52,OOO

PAYGtaxinstalments 42,OOO 214,OOO

NOTE4TRAVELEXPENSES

Travel expenses include $15,000 of motor vehicle expenses. A logbook discloses business use of 39% with anestimated18,000 business kilometres fortheyear. The remaining$20,000oftravelexpensesis fullydeductible.

Calculate Ian's taxable income for the 2021/22 tax year. Calculatenettaxpayable by Ian forthe 2021/22taxyear.

Answer rating: 100% (QA)

To calculate Ians taxable income for the 202122 tax year we need to start with his net profit and th... View the full answer