Question

Bert spends $10.60 a day travelling to work, and a further $65 a day sending his daughter Belle to a childcare centre. Bert has just received the monthly account for the childcare centre totalling $1,625, which he needs to pay immediately.

Bert owns a newspaper publishing company. He has paid a membership fee with respect to his personal membership of the World Association of Newspapers, amounting to $3,300, and he has bought a new computer for $2,200 that he keeps in his study at home.

Bert has recently purchased a beach house near Geelong. The property has been rented out to Bert’s sister since he purchased it. He took out a 25-year loan to finance the purchase. His interest payments are $7,200 a year. Bert also claims lawn-mowing expenses of $100 per month with respect to his beach house.

Required: Advise Bert about the deductibility of the above expenses. Where appropriate, refer to case law and legislation in your answer

Answer 1

The Travelling Expenses are tax deductable. So, He can Claim a Deduction on the travelling expenses.

Child Care expenses are deductable but there are certain limits for it:

Maximum Credit of $2000 for the qualifying child.

Upto $1400 is creditable.

So, the person can claim a tax deduction upto $1400.

Membership Fees can be claimed for tax deduction only if it is for official purpose. Personal purpose membership fee is non tax deductable. so, he can't claim this deduction.

Personal expenses are non tax deductable So he can't claim deduction for Computer if it is for his personal use but if it is for office use only then the tax deduction can be claimed.

Lawn mowing expenses are tax deductable only if it is used for business purpose but he has used it for personal use as his sister is staying in the beach house. so, he can't claim this deduction.