Question

For each of the following Australian resident individual taxpayers, state whether there are any amounts that would be treated as deductions (fully, none or if partially, how much). Give your reasons.

-Ian pays his home electricity bill of $700. He operates his business from his shop premises but sometimes he attends to some paperwork and planning in his living room while watching television.

-Janice purchases a computer for her business costing $3,400

Answer 1

IAN-

ANSWER: THE AMOUNT PAID BY IAN FOR HOME ELECTRICITY BILL IS NOT AVAILABLE FOR DEDUCTION.

REASON: HOME ELECTRICITY BILL IS A RUNNING EXPENSES AND AS HOME IS NOT THE PRINCIPAL PLACE OF BUSINESS AND IT DOES NOT HAVE A DEDICATED WORK AREA.

JANICE-

ANSWER: THE AMOUNT PAID BY JANICE FOR PURCHASE OF COMPUTER FOR HER BUSINESS COSTING IS AVAILABLE PARTIALLY YEAR ON YEAR ON THE BASIS OF DECLINE IN VALUE. WHOLE AMOUNT IS AVAILABLE FOR DEDUCTION IN ALL THE YEARS IN AGGREGATE.

REASON: AS THE ITEM PURCHASED IS MORE THAN $300, THE DEDUCTION CANNOT BE CLAIMED IMMEDIATELY. IT WILL BE AVAILABLE FOR DEDUCTION FOR THE DECLINE IN THERE VALUE