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FNSACC502 Prepare income tax returns for individual

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Assessment Cover Sheet This form is to be completed by the assessor and used a final record of student competency.All student submissions including any associated checklists (outlined below) are to be attached to this cover sheet before placing on the students file.   Student results are not to be entered onto the Student Database unless all relevant paperwork is completed and attached to this form.
Assessment Task Details
Term and Year Term 3 2018  
Due Date 13/08/2018 Class Room  
Student Name:    
Student ID No:    
Date:    
Qualification : FNS50215 Diploma of Accounting  
Unit Code: FNSACC502 Prepare income tax returns for individual s
Assessor’s Name Ada DU  
Assessment task 1 Portfolio of activities S / NYS / DNS
Assessment task 2 Case study S / NYS / DNS
  Final Assessment Result for this unit C  /  NYC
F eedback is given to the student on each Assessment task Yes / No
Fe edback is given to the student on final outcome of the unit Yes / No
Student Declaration: I decla completed by me honestly an that the Elite Education Vocat Assessment, Reassessment a Competency Guidelines apply re that this work has been d with integrity. I understand ion Institute’s Student nd Repeating Units of to these assessment tasks. Assessor Declaration: I d fair, valid, reliable and flexib and I have provided appropr eclare that I have conducted a le assessment with this student, iate feedback.
Name:   Name:  
  Signature:     Signature:  
Date:   Date:  
    Student was absent from the feedback session.
Assessment deadlines penalty
It is expected that unless a simple extension, special consideration or disability services adjustment has been granted, candidates will submit all assessments for a unit of study on the specified due date. If the assessment is completed or submitted within the period of extension, no academic penalty will be applied to that piece of assessment. If an extension is either not sought, not granted or is granted but work is submitted after the extended due date, the late submission of assessment will result in a late penalty fee. For further information, please refer to the Assessment Policy.
Assessment/evidence gathering conditions
Each assessment component is recorded as either Satisfactory (S) or Not Yet Satisfactory (NYS). A student can only achieve competence when all assessment components listed under procedures and specifications of the assessment section are Satisfactory. Your trainer will give you feedback after the completion of each assessment. A student who is assessed as NYS is eligible for re-assessment. Should the student fail to submit the assessment, a result outcome of Did Not Submit (DNS) will be recorded.
Principles of Assessment
Based on Clauses 1.8 – 1.12 from the Australian Standards Quality Assurance’s (ASQA) Standards for Registered Training Organizations (RTO) 2015, the learner would be assessed based on the following principles: Fairness – (1) the individual learner’s needs are considered in the assessment process, (2) where appropriate, reasonable adjustments are applied by the RTO to take into account the individual leaner’s needs and, (3) the RTO informs the leaner about the assessment process, and provides the learner with the opportunity to challenge the result of the assessment and be reassessed if necessary. Flexibility – assessment is flexible to the individual learner by; (1) reflecting the learner’s needs, (2) assessing competencies held by the learner no matter how or where they have been acquired and, (3) the unit of competency and associated assessment requirements, and the individual. Validity – (1) requires that assessment against the unit/s of competency and the associated assessment requirements covers the broad range of skills and knowledge, (2) assessment of knowledge and skills is integrated with their practical application, (3) assessment to be based on evidence that demonstrates tat a leaner could demonstrate these skills and knowledge in other similar situations and, (4) judgement of competence is based on evidence of learner performance that is aligned to the unit/s of competency and associated assessment requirements. Reliability – evidence presented for assessment is consistently interpreted and assessment results are comparable irrespective of the assessor conducting the assessment
Rules of Evidence
Validity   – the assessor is assured that the learner has the skills, knowledge and attributes, as described in the module of unit of competency and associated assessment requirements. Sufficiency – the assessor is assured that the quality, quantity and relevance of the assessment evidence enables a judgement to be made of a learner’s competency. Authenticity – the assessor is assured that the evidence presented for assessment is the learner’s own work. This would mean that any form of plagiarism or copying of other’s work may not be permitted and would be deemed strictly as a ‘Not Yet Competent’ grading. Currency – the assessor is assured that the assessment evidence demonstrates current competency. This requires the assessment evidence to be from the present or the very recent past.
Resources required for this Assessment
All documents must be created using Microsoft Office suites i.e., MS Word, Excel, PowerPointUpon completion, submit the assessment via the student learning management system to your trainer along with the completed assessment coversheet.Refer the notes on eLearning to answer the tasksAny additional material will be provided by Trainer
Instructions for Students
Please read the following instructions carefully This assessment is to be completed according to the instructions given by your assessor.Students are allowed to take this assessment home.Feedback on each task will be provided to enable you to determine how your work could be improved. You will be provided with feedback on your work within 2 weeks of the assessment due date.Should you not answer the questions correctly, you will be given feedback on the results and your gaps in knowledge. You will be given another opportunity to demonstrate your knowledge and skills to be deemed competent for this unit of competency.If you are not sure about any aspect of this assessment, please ask for clarification from your assessor.Please refer to the College re-assessment and re-enrolment policy for more information.
Task 1-Basic Knowledge check
Question1. Define assessable income AND allowable deductions
 
Scenario Lodgment date
Income tax return for all individuals and trusts where one or more prior year income tax returns were outstanding as at 30 June.  
Taxpayers who lodge their own return using e-tax or TaxPack  
Income tax return for individuals and trusts which were tax level 6 (tax payable of $20,000 or more on last tax assessment) as per latest year lodged  
Business Activity Statement for first quarter  
Business Activity Statement for second quarter  
Business Activity Statement for third quarter  
Business Activity Statement for fourth quarter  
Question 6. Give two examples of “adequate and effective conflict management arrangements” that you as a “tax practitioner” can apply future in your workplace
 
  Question 7 How much assessable income was derived by each of the following taxpayers?  
  Scenario Assessable income  
  Kelly’s net wages were $1 350. Her employer had deducted $380 tax.    
  Alan received net wages of $50 300 and bank interest of $400 over the year. His employer deducted $19 700 tax.    
  Karl received a net salary of $41 800 over the year plus $120 bank interest. He also was paid a gross salary of $2 000 for a part- time job he had during the year. The tax deducted from his full-time job was $13 600 and $600 was deducted from his part time wages.    
  Fiona runs a small business that had $36 000 in sales during the year. Her net profit was calculated by deducting $22 000 of expenses.    
  Question 8. Advise whether the following are assessable income, statutory income, exempt income or non-assessable income.  
  Scenario Income type  
  A lotto win    
  Wages    
  A capital gain    
  A gift received from a friend    
  A car allowance from an employer    
  A tax refund cheque    
  Bank interest received    
  A family tax benefit    
  Question9 Identify each of the following business outgoings as either an expense or Capital  
  Description Expense or Capital  
  Wages    
  Stationery    
  Forklift truck    
  Telephone bill    
  Fuel    
  Land    
  Photocopier    
  Question 10 Calculate Tax: Using the table of income tax rates, calculate the primary tax for the following taxpayers:  
    Name Taxable income   Residence status Tax  
  Steven 34 000 Resident    
  Martin 65 400 Non-resident    
  Gary 65 400 Resident    
  Russell 17 500 Resident    
  June 17 200 Non-resident    
  Harry 19 750 Resident    
  Sharon 110 930 Resident    
  Hanna 90 320 Non-resident    
  Courtney 224 864 Resident    
Question 11
Leila Karim is a doctor who made the following payments during the year: Doctor union fee                                                                     450 Laundering of compulsory uniform                                        90 Jacket when working night shifts                                           85 Stethoscope                                                                            120 Text book –Diabetes management                                        70 Text book –Law for doctors                                                    65 Taxi fares when called in at short notice                                70 Plain watch                                                                             60 Phone calls to check shifts                                                     8 Shoes                                                                                      85 Scissors to cut surgical gauze                                                15     Advise which of these are deductible for tax purpose and cite relevant legislation.If according to your opinion, any of the expenses are not deductible, briefly mention the reasons to the client.Explain the substantial requirements that she will need to satisfy.
Question 12
Briefly state responsibilities of tax agents, including code of professional conduct obligations under the tax agent services act (TASA) and tax agent services regulations (TASR)
 
Task two- Case study
Question 1: Prepare an income tax return form for the following taxpayer
Your client David Lucas (Role played by your assessor), is a single taxpayer. David is a bank manager and has approached to you to prepare his 2017-2018 income tax return. Before the scheduled appointment with you, some relevant income and expense information has been provided as follows, Salary: $55 630; Allowances $230; Reportable fringe benefits$4000. Employer’s ABN: 12 345 678 910 PAYG tax paid $10 560Unit trust distribution was $2264, which had franking credit of $ 113. There was also a gross capital gain of $260 that was fully discountable.David earned a $47 interest from an overseas bank account but he only received $40 after they subtracted a foreign tax credit of $7.Other income: bank interest $84; fully franked dividends $240; unfranked dividends $50.He received refunds of $450 from Medicare and his health insurer over the year.David owns an investment property that earned $13 240 rent. The expenses were: interest $10700, agent commission $910, repairs $128, rates $930 and advertising $45. When he bought it three years ago, the building itself cost $ 212 000 and at the end of last year the appliances had a WDV of $ 1285 in the low value pool. During the year David drove his 2.5 –litre car 85 km on work- related travel. He also spent $320 on union fees, $42 on laundering his grey trousers, $400 on Internet access (half of which related to his work), $45 on a text book, $80 on donations to the Red Cross and $2380 on hospital/doctors’ bills. Private health insurance cost $1230 and he did not receive any upfront Government contribution for his health insurance premium     Instructions: Not all the required documents are provided by your client, therefore, you are required to make an appointment with your client (your assessor) to gather all the required information and then prepare for the income tax return for him. From the ATO website (www.ato.gov.au) you can download the Tax return for individuals 2018 form in Portable Document Format (PDF) NAT 2541. Based on the information above, you need to submit a soft copy of the tax return completing all relevant details for the 2017-18 year, specifically pages 2- 7 inclusive. In place of the front page, attach the cover sheet and show all workings, calculate the taxpayer’s taxable income and tax payable/refundable for the financial year ended 30 June 2018。 Australian tax is levied annually on the taxable income of a taxpayer. Taxable income is calculated on the basis of assessable income less allowable deductions. Once taxable income is worked out, tax on taxable income, tax offsets, Medicare levy and tax credits need to be included to calculate the tax payable. The actual tax liability is worked out when the annual income tax return is assessed. The PAYG instalments for the year are credited against your assessed tax to determine whether there is
a tax payment or a refund. In order to calculate the tax payments for individuals, you may find the following information to be useful, Individual tax rates for residents for the period for 2017-18 can be found from https://www.ato.gov.au/Rates/Individual-income-tax-rates/Medicare Levy Surcharge https://www.ato.gov.au/individuals/medicare-levy/Capital gains tax https://www.ato.gov.au/general/capital-gains-tax/Fringe Benefits tax (FBT) https://www.ato.gov.au/general/fringe-benefits-tax-(fbt)/Offsets and Rebates https://www.ato.gov.au/Individuals/Income-and-deductions/Offsets-and-rebates/ To complete the task, you are to take the role of a tax agent and need to schedule two sessions with your client (assessor) either by phone or in person to complete the enquiry session and the result explanation session. Each session should be approximately 10mins in duration. For the enquiry session, you need to: describe the key sources of information and data required to calculate taxable income. Ask for any further information you need, for example, insurance company details, employer’s ABN; Explain your key responsibilities under the Tax Agent Services Act (TASA) and Tax Agent Services Regulations (TASR) as a tax agent to your customers; describe the procedures relating to the preparation of tax documentation for individual taxpayers.     For the result explanation session, it should be done after you complete all the calculations and filing. During this session, you need to:     explain the rules and principles of Australian tax law and main concepts included in this case, e.g. Low-income benefits, franking credit, car expense. administrative aspects of the taxes identified above including documentation, tax collection and withholding mechanisms, assessments, obligations, rulings, penalties and audits outline the key accounting principles and practices relevant to the preparation of tax documentation for individual taxpayers.
After preparing your tax return and before lodgement, you will need to seek the tax agent specialist (i.e., Role played by your assessor) advice and confirmation.
Question 2 Tax audit – Role Play and Response Letter
ATO reviewing your client Daniel’s 201X income tax return and the refund will not be issued until the finalisation of this audit. Your client has claimed that the National Affordability Scheme refundable tax offset in the correct label T11. For an individual taxpayer, it should be claimed 13B. ATO may process his return, but documents and information for national affordability scheme refundable tax offsets must be provided by Daniel. Now Daniel approached to you for seeking advice on the audit. What need to do Make an inquiry to ATO officer to obtain the information about the tax audit and be able to advise the client for documentation (Role Play with the Assessor)Respond by drafting a response letter before the due date. Please insert the following text in the subject field: Attention XXX for XXX Audit. This will ensure quick allocation and fast processing of the information. What happens next If the information your client provide supports the claims, tax refund will be released without adjustments. If the information does not support the claims or the client does not respond, ATO will adjust the claims and issue a notice of assessment. In those circumstances, an administrative penalty may be applicable. For more information If you have any concerns, you can telephone ATO on 0292114958 between 10am and 5pm, Monday to Friday, and ask for ATO officer Amelia (Role played by your assessor). While preparing the response, it is not necessary to create and provide the documents in detail, but you must create a documents’ list to support the claim. In order to complete the task, you may find the following link to be useful: <https://www.ato.gov.au/general/property/in-detail/rental-affordability-scheme/national-rental- affordability-scheme—refundable-tax-offset-and-other-taxation-issues/>
Response Letter:
Assessment Feedback Evaluation
Student’s name:      
Trainer/ Assessor’s name:   Date:  
Unit name: FNSACC502 Prepare income tax returns for individuals    
Assessment Submission Checklist to be completed by the Trainer/Assessor
Task 1
Did the student complete and provide evidence for the following: Yes  
1.   Provide a discussion on the short questions?
2.   Provide an analysis on taxable income?
3.   Provide an understanding of residence under tax purposes?
4.   Has the ability to calculate tax payable?
5.   Submit within agreed timeframe?
Task 2    
Did the student complete and provide evidence for the following: Yes No
1. Clearly addresses each of the tax requirements?
2.   Provides an analysis on taxable deductions?
3.   Correctly calculates the taxable income?
4.   Completes the tax return form?
5.   Submit within agreed timeframe?
6.   Make inquiry and provide response for an ATO audit.
7.   Requests specialist tax agent advise at least one item included / excluded from the tax return
FEEDBACK TO STUDENT:
 
Assessment outcome Satisfactory Not Yet Satisfactory Re-assessment required
    Student Signature The result of my performance in this assessment has been discussed and explained to me.                                                     Date:                       Student signature
Trainer/ Assessor’s Trainer/ Assessor’s declaration: I hereby certify that the above student has been assessed by myself and all assessments are carried out as
Signature required by the Principles of Assessments (Clause 1.8 of the Standards for RTO 2015).                                                   Date:                       Assessor signature
OBSERVATION CHECKLIST
Student’s name:        
Trainer/ Assessor’s name:   Date:    
Unit name: FNSACC502 Prepare income tax returns for individuals      
Obse It is hard to put the trainer into a agent for this task combined wit and follow the required procedur process, the following checklist To ensure calculations and infor refer to the marking guide rvation checklist to be completed by the Trainer/Assess real workplace environment, and therefore, we simulate a w h a series calculation. During the process, trainers are expec e to complete the tasks. In order to assess the students’ per must be used. mation provided to the client (assessor) is accurate and com or orkplace s ted to act formance   plete, the   cenario for a tax as a real tax agent in completing the   assessor must  
Did the stude nt complete and provide evidence for the following:     Yes No  
Consultation session      
1)   Did the session happen via phone call or face to face meeting?  
2)   Effective communication with the client? E.g. proper verbal expression, body language, active listening to the client and using clear written information/communication
3)   properly asked question to determine whether the client is employed as an employee or as an independent contractor? Question may relate to control over work, payment, independence.
4)   Able to identify and collect the required documents? E.g. Spotted any materials missing from the materials provided? Ask permission for using first hand resource?
5)   Clearly explained the obligations for a tax agent and also for a client
6)   Clearly explain the whole procedure and fee charges and ask for an agreement signed by the client accepting the terms and conditions of service.
7)   Clearly explains issues related to Privacy.
8)   the client was able to repeat back the required documentation to be provided, when prompted
Preparations and procedures for the tax return (It is hard to observe the whole procedure, but judgements can be made based on the calculations and final result)    
1)   Correctly identify and record the amounts as result of the consultation with the client
2)   Correctly calculate the assessable income and allowable deductions
3)   Identify any discrepancies or unusual features?
4)   Identify and adjust the accrued or prepaid income or expenditure
5)   Refer to the appropriate authority where unsure about how to resolve discrepancies or unusual feature
6)   Approach a specialist to ask for advice and guidance when making decisions  
7)   Calculate client’s tax obligations according to legislative requirements
8)   Download and fill in the tax return form?
Result presentation session    
1)   Did the session happen via phone call or face to face meeting?  
2)   Clearly summarized all the work done
3)   Explain in details on the tax payment calculations and inform them their current tax obligations.
4)   Outlines next steps and timelines
5)   Present a client with their completed tax documentation, and ask them to sign, authorize and endorse it to indicate their agreement that is and the information in it is true and correct
Tax lodgment    
1)   Students open the current website and follow the instructions
2)   Students know the deadline for tax return lodgment
Tax audit    
1)   Student understand the supporting documentations requested by an ATO audit
2)   Student is able to inquire the details of the audit and confirm the scope of the audit and be able to advise the client
3)   Completed agreement for services is supplied on request.
FEEDBACK TO STUDENT:
Assessment outcome Satisfactory Not Yet Satisfactory Re-assessment required
    Student Signature The result of my performance in this unit has been discussed and explained to me.                                                     Date:                       Student signature
      Trainer/ Assessor’s Signature Trainer/ Assessor’s declaration: I hereby certify that the above student has been assessed by myself and all assessments are carried out as required by the Principles of Assessments (Clause 1.8 of the Standards for RTO 2015).                                                   Date:                       Assessor signature