Question

Australian Taxation

Deductions Q1:

What deduction, if any, will be allowed in respect of the following? Give reasons. B Brown takes up a position as a taxation officer with the Australian Taxation Office. She quickly perceives that promotion to higher positions, which carry higher salary levels, depends upon her work experience and knowledge of accounting, taxation and law. She undertakes a university degree and during the relevant year of income incurs the following expenses:

 HELP fees of $2,500

 University fees of $750

 Books costing a total of $630

 Photocopying and purchases of writing aids totalling $250, and

 Travelling expenses from work to university amounting to $267.

Would your answer be different if Brown failed to pass any subjects in the first year?

Answer 1

HELP Fees - $ 2,500 is not tax deductible

University Fees - $ 750 Tax Deductible

Books - $ 630 Tax Deductible

Photocopy & Writing Aids - $ 250 Tax Deductible

Travelling Expenses from Work to University - $ 267 Tax Deductible

However, the first $ 250 which are incurred towards education are considered as self-education expenses and are not tax deductible under section 82A(2) and hence reduced from total tax deducation allowed.

Total Tax Deduction = $ 750+ $ 630+ $ 250 + $ 267 - $ 250

= $ 1,647.