CRN Prepare tax documentation for individuals, FNSACC502 ACCT189
Student Name CIT Number
Competency Title, Code and Banner Code
CRN Prepare tax documentation for individuals, FNSACC502
Assessment Type ? Written ? Case Study ? Project ? Presentation ? Other
Assessment Name AT1 – Assignment
Assessment Date Due by Monday 15/5/2017, 5pm
Student Statement: This assessment is my own work. Any ideas and comments made by other people have been acknowledged. I understand that by emailing or submitting this assessment electronically, I agree to this statement.
Student Signature Date
To be provided on eLearn.
? Student provided with feedback
Attempt 1 ? Satisfactory
? Not Yet Satisfactory
Date / /
Attempt 2 ? Satisfactory
? Not Yet Satisfactory
Date / /
Assessor Name Assessor Signature
Note to Assessor: Please record any reasonable adjustment that has occurred for this assessment.
Instructions to Assessor
Work, Health and Safety: A work health and safety check of the assessment environment is to be conducted prior to the assessment and any hazards addressed appropriately.
List the time, materials provided and assessment range and conditions on the next page
These sections should be detailed enough for multiple assessors to consistently implement the assessment and include details of location, time restrictions, level of assistance permitted (if any), WHS, environment protocols, etc. The student should have access to techniques, procedures, information, resources and aids which would normally be available in the workplace. Include if open or closed book.
Materials to be supplied may include: assessment paper, site plan, text, internet access, etc.
Information for Students: You may have two (2) attempts for this assessment.
• If your first attempt is not successful, your teacher will discuss your results with you and will arrange a second attempt.
• If your second attempt is not successful, you will be required to re-enrol in this unit.
Only one re-assessment attempt will be granted for each assessment item.
Time Allowed: Take-home assignment
Materials Provided: case scenario is provided in this paper which can be downloaded from eLearn.
Assessment Range and Conditions: This is an open book assessment.
Assessment Criteria: To achieve a satisfactory result, your assessor will be looking for your ability to demonstrate the key skills/tasks/knowledge detailed in the assignment to industry standard.
• New change to compliance requirements is identified and evaluated.
• Taxpayer’s tax obligations are calculated correctly in both the working paper and the HandiTax.
• Tax documents are lodged/submitted by due time.
Assessment Task Instructions for Students:
A. Calculate John Smith’s minimum tax liability in a spreadsheet with working details.
B. Transfer the relevant figures to HandiTax, convert the tax return summary with worksheets into a PDF.
C. (i) Give advice to John re his tax obligation, signature obtaining, substantiation and response to the ATO’s future enquires; and (ii) conduct research (e.g. via internet, journals, newspaper or other methods) on any new development in legislation, case laws, ATO rulings or taxation regulations relating to John, and evaluate how it may be applied to his tax return in around 200 words. Attach the link/reference to the information source that you have relied upon.
D. Save your answers to the above tasks in THREE files and upload them to the drop box on eLearn.
Mr John Paul Smith, a welder aged 59 years, is a resident of Exmouth in Western Australia. He has asked you to prepare his income tax return for the year ending 30 June 2017. John is both an employee welder and self-employed as a contractor.
His spouse, Fran Smith, is 57 years old and is employed as a casual teacher at the local primary school. Her taxable income for 2016/17 is $13,500.
They have two daughters: 22 years old Kirsten, a full time student at University of Western Australia, and 20 years old Karen who is disabled and receiving disability support pension.
John’s DOB: 12 November 1957
John’s TFN: 999 999 968 ABN: 78 246 373 604
Fran’s DOB: 29 May 1960
Residential address: 2 Chimp Terrace, Exmouth WA 6707
Postal address: PO Box 123, Scarbrough WA 6722
John provided you with the following figures, which are all properly substantiated:
Gross salary (leave payer’s ABN & name blank) 97,000
PAYG tax withheld 24,000
Tool allowance 1,080
Genuine redundancy payment 21,000
Superannuation gross payment $130k (ABN 27 222 266 667)
• Lump sum – taxable component – taxed in the fund 75,000
• Lump sum- tax-free component 5,000
• Lump sum – taxable component – untaxed in the fund 50,000
• PAYG tax withheld 3,000
Fully franked dividends from Fortesque 2,800
60% Partially franked dividends from Coltes 2,100
Income from welding activities as a contractor 31,000
Gross rental income from investment property 8,500
Three tools (280+199+780) 1,259
Union fees 700
Overalls and safety boots 400
Income protection insurance 1,600
Tax agent fees for 2015/16 tax return 650
Smith family appeal donation 150
Red Nose purchase (approved fund) 6
Welding business related
Cost of materials 1,050
Safety gloves and glasses 300
Mobile calls ($70/month x 12 months, 80% business) 672
Sun screen cream for skin protection 77
Public liability insurance 1,500
Superannuation paid for himself 12,000
Rental property related
Flight travel to settle property 830
Stamp duty 22,660
Materials purchased for repairs & painting 4,120
Council rates (1/3/17 – 28/2/18) 1,800
Land tax (1/3/17 – 30/6/17) 620
Landlord insurance for 12 months 960
Leasing a car for 10 days while in Canberra 780
Agent management fees @13.2% including GST 1,122
Interest on loan for period 1/3 – 30/6/2017 8,900
Natalie bought an old fridge 29/2/2017 at John’s request 950
John purchased his investment property in Canberra for $560,000 during the year. His sister Natalie lives there and recommended him a few properties before he decided to purchase this one: 7 Makeup St, Crace ACT 2911. Immediately after the settlement on 21/2/2017, John repainted the house and fixed a few things. On 25/2/2016, he authorised a local real estate agent to look after it before he flew back on that night. The property was rented out on 1/3/2016. A property depreciation schedule was obtained one month later, which shows that the total capital allowance on the property for the period from 1/3/17 to 30/6/17 is $3,820.
1. John has lived in Exmouth since 2002 and has been employed by his present employer from 30 January 2003.
2. Date of redundancy – 30 November 2016.
3. He has been doing ‘John’s welding’ business over the weekends for the past 12 years.
4. He sold the following shares on 6 December 2016:
Shares Purchase date Cost Proceeds
Fortesque 31.03.1991 4,200 4,850
Coltes 30.05.1985 13,600 4,500
Oilsearch 31.08.2006 4,020 16,000
5. Sale of collectables – John purchased two oil paintings at a public auction for $520 and $300 on 9 April 2017. A dealer valued them on 4 June 2017 at $6,000 and $4,000 respectively and paid him on the same day.
6. Motor vehicles – John has two cars registered under his name. Most time during the year, he drove a Nissan Navara to carry his bulky tools. While this car was being serviced or repaired, he drove his Holden Commodore. John also used the Holden Commodore for visiting clients, training and supervising young colleagues at different work sites. John’s family members also drove the Commodore quite often.
Purchase date Cost 2016/17 travel distance Both have effective life 8 years, using Prime Cost method for depcn
Nissan Navara 1/10/2014
YEB456 52,000 21,000 km Prior year log book shows 82% for travel between sites. Receipts show repairs & services $2,700, rego $1,300, insurance $780, fuels $2,470 for the year
Holden Commodore 1/6/2011
YPP96K 35,000 18,000 km No log book is kept. John estimated 10 travels were work related with 50km for each travel
7. John has agreed to use low value pool starting this year.
8. John has full hospital private health cover.
9. Total NET expense incurred on disability aids for Karen was $6,200. Karen could look after herself to some extent so that Fran was freed up to do casual teaching. Karen received disability support pension of $7,800 for the year.