FNSACC512 - Prepare Legally Compliant Tax Returns For Individuals

Assignment Task

1. This unit describes the skills and knowledge required to prepare non-complex income tax returns for individuals in line with statutory requirements. It encompasses gathering and verifying data, calculating taxable income, and reviewing compliance requirements.

a) Who would you consult if you required advice and guidance to determine any income tax related issues?

b) Using the Excel template provided by your firm, calculate Destiny's net tax payable or refundable for the 2019/20 tax year. Clearly show all workings for each component of your calculation.

2. Sunil Agarwal, a resident taxpayer, purchased a townhouse in Sydney as an investment property on 1 July 2019 which he made available for lease by tenants. Details of the purchase were as follows:

The vendor provided Sunil with a certified schedule indicating that the eligible construction costs of the property amounted to $140,000 (constructed in 2010). The schedule also specifies that the adjustable value of fittings was $14,500 and has a remaining useful life of 5 years.

a) Using the Excel template provided, calculate Sunil's taxable income for the 2019/20 tax year.

b) Explain below how your calculation of eligible deductions would have been different if this for the 2015/2016 tax return.

c) Write an email to your client advising him of:

• The change in tax law for claiming travel expenses as a deduction and how this will affect future tax returns.
• Record-keeping requirements for claiming eligible deductions.

3. Melissa Mitchell has operated a small sign making business since 2016 (Sign Writing Industry Code: 69240). She has not previously elected to be treated under the SBE provisions, however she would like to minimise her tax obligation. Melissa has provided you with the following information in regards to the 2019/2020 financial year. The figures provided exclude GST.

a) Using the Excel template provided, calculate Melissa’s taxable income for the 2019/20 tax year if she chooses to not apply any of the small business concessions. She has previously used the diminishing value method of depreciation.

b) Using the Excel template provided, calculate Melissa’s taxable income for the 2019/20 tax year if she chooses to apply the small business concessions and make a list of the small business concessions applied.

c) Complete the Individual Tax Return 2020. Attach a copy of the tax return to an email to Melissa requesting she sign and return the form for lodgment with the ATO and explaining the impact of the SBE concessions used.

4. Dave Banks, a resident taxpayer aged 58, was employed by Cool Brick Ice Creamery until 17 June 2020 when his position became redundant. Dave had total employment with the company of 20 years and 11 months. Upon receiving the redundancy, Dave notified his superannuation fund that he intended to retire and drew his entire superannuation entitlement as a lump sum.

a) Using the Excel template provided, calculate Dave's taxable income for the 2019/20 tax year.

b) What website did you refer to, in order to gain guidance the taxation of redundancy payments? Include link to the website.

c) What information is missing for you to be able to calculate Dave's net tax payable or refundable for the 2019/20 tax year?

d) Compose an email to Dave requesting the missing information so you can complete his tax return.

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