Tom is a single 25-year-old engineer who works in Perth. During the 2020/21 income year, Tom...

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● ● Tom is a single 25-year-old engineer who works in Perth. During the 2020/21 income year, Tom earned $110,000 in salary, from which his employer withheld $28,444 under the PAYG Withholding system. Tom has reportable superannuation contributions of $10,000 and a reportable fringe benefits total of $5,000 for the year. Tom earned $160 in interest during the year on a savings account he has with Bankwest. The bank statement shows a 'TFN withholding tax' amount of $75.20 in relation to the interest earned. Tom holds shares in Telstra Corporation Ltd from which he received franked dividends totalling $400 during the year. The total franking credits allocated to these dividends (the franking credit amount) was $171.42. Tom knows from past experience that the correct treatment of franked dividends is to (i) include both the cash amount of the dividends and the franking credit amount in his assessable income, and (ii) claim a franking credit tax offset equal to the franking credit amount. Tom sold his shares in Fortescue Metals Group Ltd during the year and made a net capital gain of $1,246. Tom has an investment property that he co-owns equally with his brother. Tom financed his half of the purchase price of the property with a bank loan. Tom paid $6,550 in interest on the bank loan during the year. The total rent received from tenants during the year was $20,800 and deductible rental property expenditure (council rates, utilities, insurance, maintenance costs) totalled $3,860. Tom is entitled to the following additional deductions: $600 for a professional conference he attended $375 for fees charged by a registered tax agent to prepare his 2019/20 income tax return Tom participates in a Lotto syndicate with a group of work colleagues. Each member contributes $10 a month to participate in lottery games. The syndicate won a total of $24,000 during the year, with Tom's share being $600. During the year, Tom made a tax-deductible donation of $100 to the Perth Children's Hospital Foundation. Part A: Tax liability statements Prepare a statement showing Tom's taxable income and his tax liability for the 2020/21 income year under each of the following scenarios. Consider all applicable offsets, credits and levies. Be sure to state whether Tom has additional tax to pay or is due a tax refund. For guidance on setting out your statement, you may find it helpful to refer to the sample income tax calculation at 18.10 of the Foundations of Taxation Law textbook Scenario 1: Assume Tom does not have private health insurance. Scenario 2: Assume Tom has private health insurance. Tom has a complying health insurance policy with a registered health insurance provider. Tom paid premiums totalling $1,080 for the period 1 July 2020 to 31 March 2021 and $360 for the period 1 April 2021 to 30 June 2021. Tom has not chosen to claim any private health insurance tax offset in the form of reduced premiums through his health fund. Consult the Australian Taxation Office website for details about the private health insurance tax offset. Scenario 3: Modified income Return to the original case details and assume that Tom does not have private health insurance. Part B: Tax implications - HELP Loan Assume now that Tom has an outstanding HELP loan of $6,476. Explain the taxation implications (if any) of Tom's HELP loan under the above scenarios. Particluars Income from salary Income from house property Rent Receoived from tenant Less: deductible expenses Less:rental property expenses Income from capital gains Gain on sale of Shares Income from other sources Interest from bank income from lottery Income from dividend Total Income Tax on income Medicare levy @ 2% MLS @ 1% Total tax Less: Pay g Less: Franking credit Less: lower middle income offset Net tax liability Amount $110,000 10,400 6,550 1930 160 nil 400 110,000 1,920 1,246 560 113726 27427.95 2274.52 274.2795 29976.75 28519.2 171.42 368.22 917.91 ● ● Tom is a single 25-year-old engineer who works in Perth. During the 2020/21 income year, Tom earned $110,000 in salary, from which his employer withheld $28,444 under the PAYG Withholding system. Tom has reportable superannuation contributions of $10,000 and a reportable fringe benefits total of $5,000 for the year. Tom earned $160 in interest during the year on a savings account he has with Bankwest. The bank statement shows a 'TFN withholding tax' amount of $75.20 in relation to the interest earned. Tom holds shares in Telstra Corporation Ltd from which he received franked dividends totalling $400 during the year. The total franking credits allocated to these dividends (the franking credit amount) was $171.42. Tom knows from past experience that the correct treatment of franked dividends is to (i) include both the cash amount of the dividends and the franking credit amount in his assessable income, and (ii) claim a franking credit tax offset equal to the franking credit amount. Tom sold his shares in Fortescue Metals Group Ltd during the year and made a net capital gain of $1,246. Tom has an investment property that he co-owns equally with his brother. Tom financed his half of the purchase price of the property with a bank loan. Tom paid $6,550 in interest on the bank loan during the year. The total rent received from tenants during the year was $20,800 and deductible rental property expenditure (council rates, utilities, insurance, maintenance costs) totalled $3,860. Tom is entitled to the following additional deductions: $600 for a professional conference he attended $375 for fees charged by a registered tax agent to prepare his 2019/20 income tax return Tom participates in a Lotto syndicate with a group of work colleagues. Each member contributes $10 a month to participate in lottery games. The syndicate won a total of $24,000 during the year, with Tom's share being $600. During the year, Tom made a tax-deductible donation of $100 to the Perth Children's Hospital Foundation. Part A: Tax liability statements Prepare a statement showing Tom's taxable income and his tax liability for the 2020/21 income year under each of the following scenarios. Consider all applicable offsets, credits and levies. Be sure to state whether Tom has additional tax to pay or is due a tax refund. For guidance on setting out your statement, you may find it helpful to refer to the sample income tax calculation at 18.10 of the Foundations of Taxation Law textbook Scenario 1: Assume Tom does not have private health insurance. Scenario 2: Assume Tom has private health insurance. Tom has a complying health insurance policy with a registered health insurance provider. Tom paid premiums totalling $1,080 for the period 1 July 2020 to 31 March 2021 and $360 for the period 1 April 2021 to 30 June 2021. Tom has not chosen to claim any private health insurance tax offset in the form of reduced premiums through his health fund. Consult the Australian Taxation Office website for details about the private health insurance tax offset. Scenario 3: Modified income Return to the original case details and assume that Tom does not have private health insurance. Part B: Tax implications - HELP Loan Assume now that Tom has an outstanding HELP loan of $6,476. Explain the taxation implications (if any) of Tom's HELP loan under the above scenarios. Particluars Income from salary Income from house property Rent Receoived from tenant Less: deductible expenses Less:rental property expenses Income from capital gains Gain on sale of Shares Income from other sources Interest from bank income from lottery Income from dividend Total Income Tax on income Medicare levy @ 2% MLS @ 1% Total tax Less: Pay g Less: Franking credit Less: lower middle income offset Net tax liability Amount $110,000 10,400 6,550 1930 160 nil 400 110,000 1,920 1,246 560 113726 27427.95 2274.52 274.2795 29976.75 28519.2 171.42 368.22 917.91

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Answer Lets calculate Toms taxable income and tax liability for the 202021 income year under each sc... View the full answer