Week 1

Question 1

Accounting income can be categorised into three boxes for income tax purposes:

Answer 1

Ordinary

Statutory

Other Gains

Question 2

Ordinary income

Answer 2

Recognised by the courts as income, eg, salary, proceeds from sale of trading stock.

Question 3

Statutory income

Answer 3

Not recognised by the courts as income but subject to tax by legislation, eg, capital gain.

Question 4

Other gains

Answer 4

Amounts received that are neither ordinary or statutory income, eg, gifts.

Question 5

Tax perspective only focuses on which 2 types of income

Answer 5

Ordinary and statutory

Question 6

Sources of tax law

Answer 6

Legislation
Case Law
Rulings

Question 7

Two types of deductions

Answer 7

General & Specific

Question 8

Taxable income

Answer 8

Assessable income (ordinary + statutory) less deductions

Question 9

Different tax rates for

Answer 9

Companies and individuals

2 tax rates for companies (based on a turnover threshold)

3 tax rates for individuals, (resident, foreign resident and work holiday visa)

Question 10

Income tax payable

Answer 10

[(assessable income - deductions) x rate] - offsets

Question 11

Medicare levy

Answer 11

2% of taxable income

Question 12

Medicare levy surcharge

Answer 12

Medicare levy surcharge applies to individuals who do not have private health cover and their income exceeds a threshold.