Taxation Law Incidence of Major Australian Taxes

Questions: 1. Calculate the Medicare levy and Medicare levy surcharge payable for the year ended 30 June 2016 for the following taxpayers? (a) An Australian resident, aged 25 years, with a taxable income of $18,000.(b) An Australian resident, eligible for a Seniors tax offset, with a taxable income of $32,000.(c) An Australian resident, aged 45 years, with a taxable income of $45,000.(d) A taxpayer who is not a resident for tax purposes, with a taxable income of $45,000.(e) An Australian company with a taxable income of $2,500,000.(f) An Australian resident, aged 45 years, with a taxable income of $110,000, holding private health insurance.(g) An Australian resident, aged 45 years, with a taxable income of $110,000, and no private health insurance.(h) An Australian resident with a taxable income of $150,000, holding private health insurance for 90 days of the income year.(i) Victor and his wife are Australian residents. Victor has a taxable income of $110,000 and his wife Jackie a taxable income of $75,000. They have no children and no private health insurance.(j) An Australian couple have four children and no private h ospital health insurance. What would be the familys minimum Medicare levy surcharge threshold? 2. You client, Rob, has the following income and deductions for the financial year ended 30 June 2015: salary, $32,000; bank interest received, $150; and allowable deductions for special work clothing, $450. Robs employer has deducted $2600 as PAYG tax from his salary during the year? 3. During the current income year Rafael, a resident taxpayer, has a gross salary of $68,000 (PAYG tax withheld $15,100), a fully franked dividend of $2,000, an unfranked dividend of $1,000, and a 60% franked dividend of $900? Answers: 1(A). Statement of Medicare Levy and Medicare surcharge payable Particulars Amount ($) Taxable Income 18,000.00 Medicare Levy 0 Medicare Levy Surcharge 0 Medicare Levy and Surcharge 0 B. Statement of Medicare Levy and Medicare surcharge payable Particulars Amount ($) Taxable Income 32,000.00 Medicare Levy 0 Medicare Levy Surcharge 0 Medicare Levy and Surcharge 0 C. Statement of Medicare Levy and Medicare surcharge payable Particulars Amount ($) Taxable Income 45000.00 Medicare Levy 900.00 Medicare Levy Surcharge 0.00 Medicare Levy and Surcharge 900.00 D. Statement of Medicare Levy and Medicare surcharge payable Particulars Amount ($) Taxable Income 45000.00 Medicare Levy 0.00 Medicare Levy Surcharge 0.00 Medicare Levy and Surcharge 0.00 E. Statement of Medicare Levy and Medicare surcharge payable Particulars Amount ($) Taxable Income 25,00,000.00 Medicare Levy 0.00 Medicare Levy Surcharge 0.00 Medicare Levy and Surcharge 0.00 F. Statement of Medicare Levy and Medicare surcharge payable Particulars Amount ($) Taxable Income $ 1,10,000.00 Medicare Levy $ 2,200.00 Medicare Levy Surcharge 0 Medicare Levy and Surcharge $ 2,200.00 G. Statement of Medicare Levy and Medicare surcharge payable Particulars Amount ($) Taxable Income 110000.00 Medicare Levy 2200.00 Medicare Levy Surcharge 27.50 Medicare Levy and Surcharge 2227.50 H. Statement of Medicare Levy and Medicare surcharge payable Particulars Amount ($) Taxable Income 150000.00 Medicare Levy 3000.00 Medicare Levy Surcharge 45.00 Medicare Levy and Surcharge 3045.00 I. Statement of Medicare Levy and Medicare surcharge payable Particulars Amount ($) Taxable Income 110000.00 Medicare Levy 2200.00 Medicare Levy Surcharge 33.00 Medicare Levy and Surcharge 2233.00 J. Statement of Minimum threshold Particulars Amount ($) Minimum threshold (A) 900000.00 Threshold increase per child 1500.00 Number of child after the first child 3.00 Total increase in threshold (B) 4500.00 Total Minimum Threshold (A+B) 904500.00 3. Computation of Rob Income For the year ended 30 June 2015 Particulars Amt ($) Net Salary 32000 Add: Bank Interest Received 150 Add: Pay G 2600 Total Income 34750 Less: Deductions 450 Taxable Income under 4-15 ITAA 1997 34300 Taxable Payable under ITRA 1986 3059 Medicare levy 686 Less: Pay G 2600 Tax payable 1145 4. Computation of Rafael Income For the year ended ... Particulars Amt ($) Assessable Income 68000 Fully franked dividend Franking credit 600 Unfranked Credit 1400 60% Franked Dividend Franking credit 162 Unfranked Credit 738 Unfranked Dividend 1000 Total Income 71900 Taxable Income under 4-15 ITAA 1997 71900 Tax on taxable income 14914.5 Medicare Levy 1438 Franking credit 762 PAYG 15100 Total Tax Payable 490.50 References Barkoczy, S., 2016. Foundations of Taxation Law 2016.OUP Catalogue. Cao, L., Hosking, A., Kouparitsas, M., Mullaly, D., Rimmer, X., Shi, Q., Stark, W. and Wende, S., 2015. Understanding the economy-wide efficiency and incidence of major Australian taxes.Treasury WP,1. Eckermann, S. and Sheridan, L., 2016. Supporting Medicare Health, Equity and Efficiency in Australia: Policies Undermining Bulk Billing Need to Be Scrapped.Applied health economics and health policy,14(5), pp.511-514. Hayward, R., 2014.Valuation: principles into practice. Taylor Francis. Miller, A. and Oats, L., 2016.Principles of international taxation. Bloomsbury Publishing. Snape, J. and De Souza, J., 2016.Environmental taxation law: policy, contexts and practice. Routledge.