Assessment Coversheet Student Name CIT Number Competency Title, Code and Banner Code CRN Prepare tax documentation for individuals, FNSACC502 ACCT189 70176 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 PRIVACY DISCLAIMER: CIT is collecting your personal information for assessment purposes. The information will only be used in accordance with the CIT Privacy Policy. Assessor Feedback: To be provided on eLearn. Student provided with feedback Attempt 1 ☐Satisfactory ☐Not YetSatisfactory Date / / Attempt 2 ☐Satisfactory ☐Not YetSatisfactory 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 liabilityin a spreadsheetwith 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, signatureobtaining, 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. MrJohn 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 2016/17is $13,500. They have twodaughters: 22 years old Kirsten, a full time student at University of Western Australia, and 20 years old Karenwho is disabled and receiving disability support pension. John’s DOB: 12November 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: Receipts: $ Gross salary (leave payer’s ABN & name blank) 97,000 PAYG tax withheld 24,000 Tool allowance 1,080 Genuine redundancy payment 21,000 Superannuationgrosspayment $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 weldingactivities as a contractor 31,000 Gross rental income from investment property 8,500 Payments: $ Employment related 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 settleproperty 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, Johnrepainted 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 allowanceon the property for the period from 1/3/17 to 30/6/17 is $3,820. Additional information: 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 $520and $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.