Public Practice

Prepare tax returns for individual

Session 1 － taxable income and deductions.

Identify assessable income – to understand types of income

  • PAYG summary
  • Employment income
  • Exempt income
  • Government Security income
  • Interest income
  • Tips
  • Personal services income
  • Fringe benefits, allowances vs reimbursement
  • Non assessable non-exempt income
  • Dividend and imputation system
  • Sole trader business income

 Identify allowable deductions – to minimise taxable income

  • PAYG summary
  • General and specific
  • Losses carried forward
  • Non-commercial business losses
  • Gifts
  • Decline in value and low value pool
  • Motor vehicle deductions (car expenses)
  • Travel expenses
  • Work related deduction – What are the catches? What should be careful about?
  • Uniform and laundry
  • Employee deductions
  • Self-education expenses
  • Borrowing costs
  • Black hole expenses
  • Sole trader deductions
  • Other miscellaneous deductions

Practical part: Individual tax return forms. Students are going to complete individual tax return forms and gain a knowledge how to interpret the information from the PAYG summary.

Session 2 － Australian marginal tax rates and tax offsets

Understand clearly how tax is calculated and how you can consult with clients to give them maximum benefits and satisfaction

  • Low income tax offsets
  • Dependant tax offsets
  • Medical expenses tax offset
  • Private health insurance tax offset
  • Government social security tax offset – beneficiary
  • Mature Australian worker tax offset
  • Senior Australian and Pensioners tax offset

Session 3 － Lodgement of Business BAS

  • Sole trader income and expenses
  • Cash accounting and accrual accounting
  • Preparation of BAS and IAS form

Session 4 － Investment – Real property and financial products

This session provides insight into the most common investment method, the negative gearing. This session explains how negative gearing is derived and therefore facilitate tax planning.

  • Capital gains – completely explained
  • Collectables
  • Personal use assets
  • Real property
  • Indexation method
  • Discount methods
  • Cost base for real properties
  • Rental income
  • Negative gearing – how to facilitate this with future earnings (capital gains)
  • Foreign exchange income

 Session 5 － Termination payments

Australia’s aging population is on the increase and therefore this session is essential to deal with retirements and use of their superannuation fund. This session provides overview of the different tax adjustments for termination related payments (redundancy and superannuation).

  • Employment termination payment overview
  • Tax calculation - termination payment
  • Genuine redundancies
  • Early retirement payment
  • General retirement
  • Superannuation
  • Income stream as investment
  • Lump sum
  • Superannuation withdrawal for non-Australian resident (eg. Overseas students)

Prepare tax returns for legal entities

Session 1 － Partnership business

  1. Partnership business

  • Definition and benefits of partnership business
  • Partnership agreement
  • Legal part of partnership – registration and training name
  • Advantages and disadvantages

  1. Taxation

  • Partnership share or loss
  • Partnership net income
  • Partnership capital gains
  • Partners’ salaries
  • Lodgement of BAS and lodgement of income tax

Practical part (a few different partnership industry examples will be provided for your practical exercise)

  • PAYG instalment calculation
  • Reconcile payroll with BAS and final PAYG amount, GST account and other balance sheet items.
  • Preparation of quarterly BAS for lodgement and annual GST.
  • Preparation of partnership trial balance
  • Preparation of financial statements including P & L, balance sheet from partnership’s trial balance.
  • Preparation of depreciation schedules
  • Preparation of quarterly report of contractors’ payments to ATO and the taxable payments annual report (NAT 74109-05.2012) for construction business only.

Session 2 － Small Business Entity

  1. Eligibility
  2. Simplified decline in value rules
  • General pool – how it works
  • Immediate deduction for depreciable assets
  • Motor vehicle depreciation rule with general pool (Accelerated deduction for motor vehicles)
  • Trading stock rules
  • Small business capital gains tax concessions
  • 15 year exemption
  • Active asset 50% reduction
  • Retirement exemption
  • Small business rollover

Practical part (a few different industry examples will be provided for your practical exercise)

  • Preparation of client's commercial vehicle hire purchase (GST treatment, unexpired interest amortisation, HP liability)
  • Reconcile payroll, ATO integrated client account and other balance sheet items. Preparation of quarterly BAS for lodgement
  • Preparation of depreciation schedules (using General Pool)
  • Reconcile payroll with PAYG summary
  • Reconcile ATO integrated client account and other balance sheet items.
  • Preparation of quarterly BAS for lodgement
  • Preparation of the hire purchase items - amortisation and HP liability records
  • Preparation of financial statements including P & L, balance sheet, notes to the accounts etc.
  • Preparation of company tax return
  • Preparation of director's individual income tax returns

Session 3 － Companies

  1. Definition and setting up companies – compliance with ASIC and ATO
  2. Public and private companies
  3. Calculation of taxable income (reconciliation)
  4. Lodgement of BAS and income tax
  5. End of year reconciliation
  • Wages
  • PAYG withholding
  • PAYG instalment
  • GST
  • Other information on BAS with final balances
  1. Tax losses – deductibility and utilization of the losses
  2. Division 7A – private companies only
  • Definition
  • Division 7A agreement
  • Calculation (minimum loan repayment)
  1. Year-end balance adjustment
  2. Car fringe benefit: most company directors overlook the private usage of the company car(s). Recent changes in car fringe benefit tax by ATO are thoroughly explained in this session.
  • Statutory method
  • Operating cost method
  • Employee contribution method (ECM)

Practical part (a few different company industry examples will be provided for your practical exercise)

  • Preparation of GST and PAYG withholding for lodgement (BAS)
  • Reconcile payroll with PAYG summary
  • Reconcile ATO integrated client account and other balance sheet items.
  • Preparation of quarterly BAS for lodgement
  • Division 7A interest, loan closing balance and minimum loan repayment work book
  • Fringe benefit tax for motor vehicle calculation (especially for 99% of private company directors)
  • Preparation of financial statements including P & L, balance sheet, notes to the accounts etc.
  • Preparation of depreciation schedules
  • Preparation of company tax return and director’s tax return

Session 4 － Franking accounts

  1. Understanding of franking system in Australia – what is involved
  2. Benchmark rule for setting franking percentage
  3. Franking surplus or deficit
  4. Franking debit

Practical part

  • Calculation of franking deficit
  • Calculation of franking deficit tax
  • Calculation of over franked amount and penalty
  • Preparation of franking accounts in consecutive 2 years
  • Calculation of dividend payments to shareholders

Session 5 － Trust and minors

  1. Definition
  2. Benefits
  3. Types of Trust (advantages and disadvantages)
  • Family trust
  • Unit trust
  • Hybrid trust
  1. Taxation of Trust
  • Inter vivos
  • Deceased estate
  1. Taxation for minors
  • Definition
  • Special tax rules for minors
  • Excepted persons
  • Eligible income
  • Excepted income

Practical part

  • Preparation of trust distribution schedule for beneficiaries
  • Determine trust net income (ITAA section 97)
  • Calculation of trust assessment for beneficiaries with disability (ITAA section 98 and section 98A)
  • Calculation of trust assessment for beneficiaries with no presently entitled (ITAA section 99 and section 99A)
  • Tax return preparation for minors (section 98 and section 98A)
  • Preparation of Trust tax assessment (section 99 and section 99A)
  • Preparation of trust tax return
  • Reconciliation of trust distribution and beneficiaries’ tax return