Individual Assignment Guidelines and Specifications

Question 1 (30 Marks)

You are working as a staff member at Pacific Accounting and Tax Services Pty Ltd in Sydney. Your client, Melissa, owns and operates a mechanical centre in Sydney as a sole trader. The business is known as "Melissa's Workshop." Melissa has an ABN, a registered business name, and is also registered for GST. In addition to her business, Melissa has other sources of investment income that she owns individually and works part-time, earning a salary. The following figures are as at the end of the financial year, 30 June 2024, and do not include GST. (Do not make any adjustments for GST)

Receipts

4,500                                     Interest on Bank deposits

96,700                                   Sale of car parts

48,500                                   Rent from her investment property

3,240                                     Refund from the ATO for the last year’s tax return

25,000                                   Lottery win – Kathren was just very lucky.

Payments

36,000                                   Rent on her workshop

3,400                                     Body Corporate fees on income producing property.

85,000                                   Employee salaries

10,800                                   Superannuation contribution for employees

1,500                                     Fees paid to a registered Tax Agent

2,000                                     Travel to and from work to home

Please advise Melissa on the above-stated transactions with reference to the relevant statutory and common law provisions (14 Marks)

Additionally,

1. Her taxable salary from her part-time work is $109,000 (including tax withheld).
2. She does not have private health insurance.
3. She is a resident taxpayer.
4. Melissa has an outstanding student loan of $57,000 from her studies at Sydney University.
5. Melissa's employer paid a superannuation guarantee charge of 12% on top of her salary to her nominated fund.

Calculate Melissa’s personal tax liability for the year ended 30 June 2024. You should explain your treatment of each item in this question.

Your answer should be in the correct format of Assessable Income less Allowable Deductions along the lines of the income tax formula. This gives you Taxable Income and you multiply this by the different marginal tax rates plus Medicare levy, Medicare levy surcharge (if apply) and education loan. This gives you tax payable less any tax offsets. (16 Marks)

QUESTION 2 (10 MARKS)

Suresh is a technician working at Melissa's car repair centre. Due to a dangerous workplace accident, Suresh became seriously ill and received compensation of $131,000. The lump sum was divided as follows: $57,000 for loss of earnings, $43,000 for loss of future earning capacity, and $31,000 for pain and suffering. Based on legal provisions and case law, advise Suresh on whether any of these amounts will be considered assessable income.

Furthermore, advise Suresh whether it would be better to accept a lesser sum of $110,000 without any specified allocation between current earnings, future earnings, and pain and suffering.
 

Advise Suresh, referencing both Statutory Law and relevant Case Law.

Student Assessment Citation and Referencing Rules

Holmes has implemented a revised Harvard approach to referencing. The following rules apply:

1. Reference sources in assignments are limited to sources that provide full-text access to the source’s

content for lecturers and markers.

1. The reference list must be located on a separate page at the end of the essay and titled:

“References”.

1. The reference list must include the details of all the in-text citations, arranged A-Z alphabetically by author surname with each reference numbered (1 to 10, etc.) and each reference MUST include a hyperlink to the full text of the cited reference source.

For example:

7. Hawking, P., McCarthy, B. & Stein, A. 2004. Second Wave ERP Education, Journal of Information Systems Education, Fall, http://jise.org/Volume15/n3/JISEv15n3p327.pdf

1. All assignments must include in-text citations to the listed references. These must include the surname of the author/s or name of the authoring body, year of publication, page number of the content, and paragraph where the content can be found. For example, “The company decided to implement an enterprise-wide data warehouse business intelligence strategy (Hawking et al., 2004, p3(4)).”

Further referencing for Acts/Statues and case law – students require to use the following example. These examples apply to law-related units only.

Referencing legislation and Cases: Examples