Definition of Assessable Income Free Sample for Students

Questions: 1.Calculate the net income tax payable or refund due to the taxpayer for the 2015/2016 tax year. State the specific taxation rules relevant to the above events to Support your Arguments and Calculations. 2.a) Determine Whether the above events are assessable during the year ending 30 June 2016? Ensure you state the Specific legislation, tax rulings and Case Law to Support your answer. b) Calculate the Amount of tax to be withheld by the Employer due to the termination of her Employment. Answers: 1.Assessable income can be defined as the income, which is earned during the taxation year. Marc bases the existing study on the depiction of the assessable income together with the net income tax payable or refundable during the taxable year of 2015-16. The below stated rules and assumption depicts the tax payable by Marc; Section 6-5 of the ITAA defines that salary received by employer is assessed as ordinary income. Section 83-A defines that 15 day annual leave is included in the assessable income As stated under section 15.2 travelling allowance is included in the assessable As defined under section 15.2, compensation received by the workers for termination of employment due to the injury will be considered for assessment (Miller and Oats 2016). As stated under section 15.32 under the Rehabilitation and Compensation Act 1992, compensation received for loss of hand is exempted income and it is not taken into the considerations while computing tax. The sum received by Marc due to his inability does not falls under the employment termination payment Division 52, of the social security disability support states that disability support is not considered as taxable income. It is necessary for Marc to declare such income as assessable income however while calculating tax it is excluded from the calculation of taxable income (Lang 2014). As stated under section 6.5 Interest from foreign source such as interest received from Bank of America is taken into considerations at time of calculating tax. It is necessary for Marc to declare the entire sum accrued from bank. Tax withholding constitutes the part of resident gross tax deducted by the Bank of America from an Australian occupant and deductible amount will be included in the gross tax of Marc. Marc receives a costly bottle of whisky and cash from his co-worker and the same cannot be considered assessable income as the sum is not so significant. Marc by profession is a fire-fighter and needs a fire fighting gears to discharge his duties during the course of his employment. Section 8.1 defines that the amount incurred for fire fighting gears is considered as deductible expenditure. PayG is considered for deductions as advance tax while paying to employees, these expenditure is generally considered for deductions from the gross sum of tax payable by the taxpayer. Marc assessable income and the net amount refundable is stated below for the taxable year of 2015-16; 2.Jane Nobles income and expenses is laid down below for taxation purpose, which are as follows; Section 83-C defines that if genuine redundancy is below than the amount of tax free components then such amount is not considered for payment however, genuine redundancy is generally considered as taxable income. The amount of genuine redundancy is computed for the tax-free constituent of the taxpayer and it is assessed based on the basic pay and tenure of service of the taxpayer (Reinstein et al. 2016). From the current situation, the basic pay of Jane is not stated in the case study therefore, redundancy receipt can be either considered for tax or may be excluded while computing tax. Section 83-A defines that upon termination of employment annual leave payment is regarded as taxable income. Section 8-1 of the ITAA 1997, defines that monthly rent of business property is regarded for deductions. As Jane does not have to pay monthly rent for first six months hence, it will not be considered as deductible expenses for the year ending 30 June 2016 (Barkoczy 2016). 3.In accordance with the age of Jane, PayG withholding for her genuine redundancy is calculated below, References Barkoczy, S., 2016. Foundations of Taxation Law 2016.OUP Catalogue. Lang, M., 2014.Introduction to the law of double taxation conventions. Linde Verlag GmbH. Miller, A. and Oats, L., 2016.Principles of international taxation. Bloomsbury Publishing. Reinstein, T., Ahlers, A., Arnold, J., O'Leary, J. and Klinzing, M., 2016. Tax Developments in 2016 Part 1: Federal Tax.Tax Executive,68, p.21.