Question

Q1 (Taxable income from Australian and foreign sources)

Yvette Jankic, a resident single taxpayer aged 31, worked in New Zealand from 1 July 2017 until 15 November 2017 and has provided the following information for the 2017/18 tax year:

Receipts	$
Interest (net of TFN tax withheld $490)	510
Interest from United Kingdom (net of withholding tax $300)	2,700
Dividend from the U.S. state of Georgia (net of withholding tax $2,100)	3,900
Gross salary – Australian employment (PAYG tax $5,285 withheld)	21,000
Reportable fringe benefit as per PAYG Summary	6,252
Net salary – New Zealand employment (tax withheld $2,540)	12,650
Bonus from Australian Employer for exceptional performance	2,000

Payments	$
Interest and Dividend deductions relating to United Kingdom and Georgia investments	250
Work-related deductions relating to Australian employment	300

a.Calculate Yvette’s taxable income for the 2017/18 tax year.

Taxable income is:

Interest (Australia) (510 + TFN tax withheld $490) $ 1,000

Interest (United Kingdom) (2700 + net of withholding tax $300) $ 3,000

Dividend (USA) (3900 + net of withholding tax $2,100) $6,000

Gross Salary – Australia $21,000

Gross Salary – New Zealand (not exempt) (12,650 + tax withheld $2,540) $15,190

Bonus from Australian Employer $ 2,000

Assessable Income $48,190

(Reportable Fringe Benefit is not included)

Less Deductions :

- Interest and Dividend Reductions from UK and USA $250

- Work related deductions relating to Aust. employment $300 $ 500

Total Taxable Income $47,640

  

b.Calculate Yvette’s net tax payable or refundable for the 2017/18 tax year.

Tax payable is:

Tax on $47,640 ($3,572 + 32.5% x ($47,640 - $37,000) $ 7,030

Less: Low-Income Tax Offset ($445 – 1.5% x ($47,640 - $37,000)) $ 285.40

$ 6,744.60

Add: Medicare Levy - 2% of $47,640 $ 952.80

$ 7,697.40

Less: PAYG instalments $5,285

Withholding Tax on Aust Interest $ 490

Foreign Income Tax Offset - limit $4,940* $10,715.00

Tax Refundable $ 3,017.60

*Foreign Income Tax Offset

Tax on $47,640 ($3,572 + 32.5% x ($47,640 - $37,000) $7,030

Less Tax on $23,700 (19% x ($23,700 - $18,200) $1,045

$5,985

However as Total Foreign Tax Paid is:

Withholding Tax on UK Interest $ 300

Withholding Tax on USA Dividend $2,100

Tax on New Zealand Employment $2,540

Total Foreign Tax Paid $4,940

Can only claim this amount as Foreign Income Tax Offset

Can you please check my answer for both parts (A and B) .if i done them right or not

Answer 1

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