Taxable income169,185.524,185.5 Assumptions Juliet entitled to the maximum low income tax offset of $1,500 as her taxable income does not exceed $30,000.Home mortgage to Mr. Robert and Credit card interest is not allowable expenses. Traveling and entertainment expenses are not waived from the tax burden since this were not use for the purpose of the business. They are both subject to Medicare levy as their income is above $ 8000 separately Donations are not taken as allowable since there was no any benefit derived from the it They are taxed as follows; Robert taxJuliet 24,185.5* 0.15$3,627.825$169,185.5*0.037+17550 $ 80,148.64Medicare levy170,385.5*1.5%25985.5*1.5%2555390Medicare sub charge 170,385.5*1%1704$ 4017.83 Tax payable by Mr.
Robert is $80148.64 +2555 +1704 = 84,407.64Less- Franking credit 771/2 = (385.5)$ 84,022.14Tax payable by Juliet is $ 4017.83Less Franking credit (385.5) (1,500) $2132.12Question twoTaxation strategiesThis is the strategy that involves maximizing the total tax deductions in the current financial year with an aid of reducing the assessable income. Mr. Robert should adopt this strategy to reduce his tax liability (Joseph J. Cordes, 2008). To adopt this strategy Robert should reduce his assessable income using superannuation. Complete tax deduction is available in favor of all superannuation contributions made on his wife as employee and himself (Zane Swanson, 2006).
This strategy saves Robert from paying lots tax liability. Secondly Mr. Robert should embark on claiming more tax deductions on payment of interest the finances alternatives like the mortgage or the investment. Strategies for minimizing the tax liabilityMr. Robert total tax is relatively high. He needs to adopt the following strategies to reduce the tax burden; Bringing forward his tax deductions Also on donation to a charitable organization, Mr.
Robert should make sure he is registered with the Australian Business Register website which allows exception on the non allowable tax deductions such as donations (Deborah Schanz, 2011). This is allowable only if a benefit is derived out of the donations. Capital Gains Tax DiscountsWhen an asset is sold, the increase in value in selling it which is capital gain is subject tax, Mr. Robert should claim for the discount on the capital gains since capital gain is treated as income and is taxable but he needs to apply discount which is waived from this tax.
This capital gain discount percentage is available to individuals, trusts and superannuation funds. In order for Robert to claim capital gain discount he should have posses the asset for the one year. After which he will get 50% discount for capital gains made by an individual or a trust or 33.33% discount on complying with the superannuation (Zane Swanson, 2006). By doing this, Robert will save a lot of tax liability especially when the value of asset is high. Divert of Income and Assets to trust This is the strategy that involves transfer of ownership of income to the beneficiaries to lower the income subject to taxation.
Robert having two kids, should put is income and assets under the trust foe the beneficiaries. Tax Offsets and RebatesThis involves an ideal way of limiting the tax liability (Hugh J. Ault, 2010). Mr. Robert s claim for the following has his strategy to limit tax payable;