Deductible Expense for Joseph
Autor: moto • September 15, 2011 • Coursework • 721 Words (3 Pages) • 1,602 Views
1) Annual subscription fee of $600 for the Law Society
This expense could be deductible when the subscription for the Law Society is necessary for his employment in the law firm. Otherwise it will not be allowable as a deduction. If Joseph pays the subscription fee for the purpose of enhancing his law knowledge and legal skills which enable him to engage in the assessable income earning activities, the expense could also be deductible. The expense will show a close connection with his career.
Under TR 98/9
If a tax payer's income earning activities are based on skill or knowledge and the self education enables the tax payer to maintain or improve that skill/knowledge which might lead to an increase in a tax payer's income from his/her current earning activities, the self education expenses are deductible.
Similar case (Finn): The tax payer took leaves to travel ovseas for knowledge enhancement in order to get a promotion. The travel expenses allowed as a deduction.
(Hatchett): Tax payer was a teacher and claimed deduction of $89 to obtain a Teacher's Higher Certificate and $71 fees in relation to an Art Degree. $89 was deductible since the certificate enabled tp to earn more assessable income. $71 was not deductible for there was no real connection between the expense and the tax payer's current income producing activity.
2) Course fees of $2000 for a post-graduate degree in accounting
The course fees of $2000 for a post-graduate degree in accounting will not be allowed as a deduction. The reason is Joseph is hoping to change his career and there is no connection between the accounting and his current income producing activities.
Under TR 98/9
No deduction is allowed for self education expenses if the study is to enable a tax payer to get employment, to obtain new employment or to open a new income earning activity.
Similar case (Maddalena): Tax payer was an electrician and also played football professionally. He claimed deduction for travelling and legal expense coming to Sydney to negotiate a transfer to a different club. Money spend to obtain a new employment is not allowable as a deduction.
3) $2200 for work suits
The $2200 for work suit is not deductible as it could be recognised
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