Tax is a non-voluntary payment that the government charges for the public activities. Thus, any discrepancy in the same leads to serious consequences. Not everybody is familiar with the countless laws, provisions, rules, sections and other intricate details that govern the tax payment, individual or organisation. As a result, the tax lawyer comes like a saviour who guides them through the unfamiliar territory.
That’s what happens when they don’t know how to file taxes.
Should You Begin Your Assignment with What Taxation Law Is?
The students have a bad habit; they start their taxation law assignments by explaining what is taxation law, how is it useful, and other details.
But that is not the right approach. Why? Because you are a student of taxation law and (s)he is a professor of taxation law. There is near to zero probability that you or the professor do not know –
- What is a taxation law?
- Why taxation law is important?
- What is the use of taxation law?
- Why taxation lawyer is needed in organisations?
Or any other related elementary question.
The best way to start your assignment, report, essay or anything, should be talking about the question or topic.
What Details Are Generally Given in Assignments?
Every assignment is framed in a different way. But we have here provided a taxation law assignment sample online that our experts received. Check it out.
The above question is a situation type where the details are given to you and now you have to identify the details like if the company underpaid the taxes, evaded taxes or how much tax do they need to pay and other similar details.
Solving Taxation Law Assignments? Don’t Forget These Topics!
That’s the kind of determination you need for these topics that will make the answer better than what it already is.
Learn to Read Financial Statements
The entire structure of tax is built upon the financial statements of the organisation. Every single transaction needs to be seen, analysed and categorised under the tax.
Identify the income statement of the organisation where all the incoming earning is there.
The second one is a balance sheet in which you will find all the details of the assets of the organisation, their finances through debt and liquidity.
The third type is the cash flow statement where you will see the net amount after considering all the incoming cash and the outgoing cash.
Fist In, First Out Method
It is an assumption that the financers generally use. You can also frame the taxation calculations around the same but will have to mention clearly or use if the same is mentioned in the question file.
If you are using FIFO method on your own, it should be first confirmed by the professor to avoid unwanted complications.
The FIFO method says the items that came in first will be removed from the inventory first. This way the items that will remain in the inventory will be the one that is the most recent one. Hence, the inventory recorded in the balance sheet will be the ones that are the most recent costs incurred.
Net Capital Gain and Net Capital Loss
Everything that a person owns, personal or otherwise, is a capital asset. When you sell an asset, an adjusted basis is identified (the amount for which the item should be sold) and you formulate the amount from the sale. The difference between these two forms whether you have a gain or loss.
When the asset is sold for more than the adjusted basis, it is a capital gain.
When the asset is sold for less than the adjusted basis, it is a capital loss.
To identify the same in your file, you have to snoop around the internet and conduct research. This research is necessary for identifying the adjusted basis of the asset.
Fringe Tax Benefit
The employees, generally, receive other benefits from the employer that supplement the salary of the employee. The employee does not need to pay any tax for that but the employer pays Fringe Benefits Tax.
Fringe Benefits are a way that organisations see to motivate the employees and increase the employee retention rate. So, as a tax lawyer, you should be aware of what counts as a fringe benefit. The common ones are –
- Availability of loans at lower rate of interest,
- Use of company car,
- Gym memberships (for free or low price),
- Entertainment expenses like food, accommodation, etc.,
- Childcare fees, and others.
To calculate the fringe benefit tax, there are 8 steps you should follow.
- Identify the fringe benefit
- See the taxable value of the fringe benefit
- Calculate the total taxable value for which GST can be claimed
- Calculate the total taxable value for which GT cannot be claimed
- Calculate the grossed-up taxable value (GST claimable)
- Calculate the grossed-up taxable value (GST non-claimable)
- Add both grossed-up taxable value for the total fringe benefits taxable amount
- Multiply total fringe benefits taxable amount with FBT rate to get actual FBT amount
It is not necessary that the taxpayer or the business owner always takes part in the activities directly or materially. This usually happens where there is a borrowing of something other than money is involved. Other than this, there can be various activities where the taxpayer is not participating regularly and continuously.
The passive activities are –
- Renting the equipment that you own,
- Renting the real estate property
- Sole proprietorship or farm but do not participate
The passive activities are useful when the rental or business runs without material participation of the taxpayer. Such taxpayers have a passive income instead of a regular income.
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