Question

Pat operates a medical practice in Bendigo and incurred the following expenses for the year ended 30 Jun 2020: Paid $800 for a gym membership. She believes that by keeping fit and healthy she performs better as a Doctor. Paid $1,000 per week for 52 weeks to her husband James for performing bookkeeping services to the practice. James works a standard 5 hours per week on the practice books. Pat had been paying a bookkeeping service $80 per hour for the same service. Accured a provision for long service leave of $7,600 in respect of her employees' unused leave as at 30 June 2020. Based on these expenses, what amount can Pat claim as a tax deduction for the year ended 30 June 2020? a. $28,400 b. $20,800 c. $52,000 d. $31,200 e. $29,200

Answer 1

Answer:-

c. $52,000.

The amount paid to Pat's husband of $1,000 per week for the bookkeeping services will sum $52,000 in a year. Accounting fees is an allowable deduction. Regardless of the initial charges paid for bookkeeping service $80 per hour for the same service, the agreement between James and Pat is different with the earlier bookkeeper. The gym membership is personal and the accrued provision for long service leave of $7,600 in respect of her employees' unused leave as at 30 June 2020 is an expense to deduct in the coming tax year.