The paper "David and Jennifer’ s Eligibility to Education Tax " is an outstanding example of a finance and accounting case study. Australian state and federal parliaments impose a tax in various kinds of revenues earned. Federal revenues include income raised customs and excise duties, 90% of goods and services tax and fringe benefit. The state also collects revenue from payroll tax, stamp duty, motor vehicle tax, gambling tax, and land tax. In the case of David and Jennifer, the Australian Tax Office recognizes them as couples and they are individually taxed as husband and wife. The family will be taxed on a 50/50 basis on the jointly owned investments units.
The total annual income of $10,044 will be assessed separately on David and Jennifer on a 50/50% basis. The agent’ s fee of 7% is an allowable deduction expense to both the couples which will be taxed on the agent. Being the Australian residents, David enjoys certain tax exemptions on Federal income tax which are levied on his assessable income of the business. This is assessed jointly with his other income less any allowable deductions.
Assessable business income is the income that the business generates; therefore it does not include David’ s GST payable on sales or even GST credits. Allowable expenses such as travelling expenses in the course of duty will be allowed. The couples gross income from their personal services such as the business, rental income and the capital gains arising from the appreciation of the unit are taxed accordingly. According to the CGT act an asset held in a period of more than one year, 50% of the net capital is assessed.
Their total business assessable income for David will be subject to capital expenditure claims used incurred in earning income. ATO recognizes the deductions made on the individual business income. However, David should limit his tax liability by claiming capital allowance on items such as the IT business equipment and capital expenses on the rental units Australian Tax Office (ATO) act recognize income from any activity of the business carried on the reason of profit-making, therefore, the business taxation is controlled the marginal returns for purposes of the growth of the business. In the case of the David business activities, Tax File Number (TFN) enhances tax operations by the Australian Tax Office (ATO). David and Jennifer’ s eligibility for education tax Education tax refund assists qualified families and also independent students to meet their obligation of primary school and secondary school education cost.
The couple incurs a total cost of $65000 per year for their three children in private schools. They can claim an education tax refund for expenses they incur in educating their children. The family can claim up to 50% of the eligible expenses incurred in the education of children in primary and secondary schools.
This is because payment of school fees for the children denied them receiving family tax benefit part A for those children. The maximum amount they can claim is 50% of eligible school fees expenses of up to: $750 for their child in primary school, that is $375 of refund; $3000 for their two eligible children in secondary school, that is $1500 of refund. The excess amounts will be claimed in the subsequent years because they are eligible for a refund.
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