You work as an employee of Woodford Pty Limited, a registered tax agent.

You have recently acquired a new client, Leo Smith, who owns a business with income of $200,000

Leo is married to Melinda, and they have two children aged 13 and 15 years old. They own their own home and have approximately $60,000 in share investments.

Both Leo and Melinda are new to business ownership, as both have only ever been employees and are not clear on the tax considerations  of operating a business through various legal entities.

Required:

 
1. Based on  profits of the business being $200,000, Calculate the tax payable if the business is operated :

-As a sole trader

-As a partnership between husband and wife

-As a private company where salaries of $80,000 each are paid to the husband and wife and balance is taxed in the company

-As a family trust where  the beneficiaries of the trust are Leo, his wife and their 2 children

Answer rating: 100% (QA)

To calculate the tax payable for the business operated under different legal entities well consider the profits of the business being 200000 and analy... View the full answer