Essays on Taxation Principles Provided under the Australian Income Tax Act Assignment

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The paper "Taxation Principles Provided under the Australian Income Tax Act " is a perfect example of a finance and accounting assignment. When it comes to the assessment of taxable income, many factors relating to taxation must be fully incorporated. The amount to be treated as taxable income should include annual salary and all taxable benefits. The taxation principles provided under the Australian Income Tax Act provides the way forward on how to tax employment and non-employment benefits. Therefore, arriving at the taxable income, we need to assess all employment benefits in relation to income tax.

This must be done in relation to Income Tax of 1986 and other subsequent Acts that have been put in place to meet the diversity of taxation. This is based on the fact that with time, commerce has undergone tremendous growth and modification. As the means of trade continue changing, necessary improvements have also been undertaken on the Income Tax in Act order to meet these needs. To start with is the superannuation contribution. The 26-year-old Jackie Jacob made a personal contribution of $20,000 for the year ended.

The concession cap that is set in relation to personal contribution is $25000 per member for a year. This is designed for taxpayers who are aged below 50 years. In this regard, Jackie Jacob automatically qualifies. When it comes to a tax deduction, Jackie failed to inform his super fund in time. According to rules governing super contributions, the timing is very important if one is to be considered for a tax deduction. Since at lodgement the trustee had not received a section 290-170 notice, Jackie does not qualify for a tax deduction.

Therefore, Jackie will be levied a tax upon the whole amount contributed. On the taxation of the $1000 contributed by his employer, its taxation is depended on whether the TFN has been quoted or not. If the TFN has not been quoted it automatically attracts a higher taxation rate. In this regard, the amount paid in by the employer qualifies for taxation and is therefore added to assessable income. In dealing with the franked and un-franked dividends, they are both taxed. Nevertheless, the taxation rates charged differs.

Put in mind that the issue of franking in Australia is aimed at minimizing the tragedy of double taxation. In this regard, the franked dividends include a portion of tax already paid in by the company. Therefore, Jackie will pay less tax on the component of dividend that was franked. On the other hand, the un-franked dividends will attract a full tax. Therefore, the 14000 worth of dividends that was franked, the pre-tax value will have to be calculated. From this point, it will be now easier to assess the amount that had to be paid and the subsequent tax that the taxpayer is supposed to pay.

In this regard, the taxpayer will end up paying less on these franked dividends. In contrary, the taxpayer will be required to pay the full amount due on the un-franked dividends. Co-contribution by the government is made as an encouragement to taxpayers to continue making contributions into the super fund. This is aimed at boosting an individual’ s future savings. This contribution does not attract any tax when is made into the super fund.

At the same time, the amount is not treated as income when filing tax returns. According to the Australian tax office, a member does not need to apply for such a contribution. One qualifies automatically as long as they are making a personal super contribution. This amount is usually preserved in the super fund until when other preserved amounts are accessed. At the end of it, this contribution does not have an impact on the assessable tax.

Works cited

Brown, Eric C. Business-income taxation and investment incentives:Income, employment and public policy: Essay in honour of Alvin H. Hansen.New York: Norton, 1948. Print
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