Taxation course - summarization
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DEDUCTIONS
GENERAL DEDUCTIONS
s.8-1
-incurred in gaining or producing assessable income
-necessarily incurred in carrying on a business
Exclusions:
- capital expense
- private or domestic expenses
- expenses incurred in producing exempt income
- expenses which are specifically disallowed under the Act
Others
1. Clothing and uniforms
- protective, occupation specific uniforms, compulsory uniforms and embossed uniform
2. Home office or home study
Occupancy costs
(interest, rates and taxes, depreciations of furniture )
Running costs
(Electricity, Heating)
Operate from home
YES
YES
Choose to do some work from home
NO
YES
3. Travel expenses
- between workplaces
- if they have to take heavy tools
- if the taxpayer don’t have a regular fixed place of work (piano teacher)
- if work commence at home
STATUTORY DEDUCTIONS (division 25)
DIV. 25
1. Tax related deductions
s.25-5
- paid to a recognized tax adviser
2. Repairs
s.25-10
3. Lease document expenses
s.25-20
- preparation, registration or stamping
4. Borrowing expenses
s.25-25
- stamp duty for loan, application fees, valuation fees and broker’s fees
- deduction in the term of the loan (max 5 years)
- calculation: e.g. amount 500, loan period 5 years, days in first year 100
1 year: (500/1825 days in 5 years)x100 days=27.39
2 year: (473/1725 days left)x365 days
5. Mortgage discharge expenses
s.25-30
- expenses incurred to discharge a mortgage given as security
6.Bad debts
s.25-35
- the debt must be written off as bad during the year
-the debt must have been bought into account as assessable income
7. Losses by embezzlement (caused by theft, stealing)
s.25-45
8. Payments of pensions/retiring allowances (only if it can be shown to be in the future interest of the business)
DEDUCTIONS
GENERAL DEDUCTIONS
s.8-1
-incurred in gaining or producing assessable income
-necessarily incurred in carrying on a business
Exclusions:
- capital expense
- private or domestic expenses
- expenses incurred in producing exempt income
- expenses which are specifically disallowed under the Act
Others
1. Clothing and uniforms
- protective, occupation specific uniforms, compulsory uniforms and embossed uniform
2. Home office or home study
Occupancy costs
(interest, rates and taxes, depreciations of furniture )
Running costs
(Electricity, Heating)
Operate from home
YES
YES
Choose to do some work from home
NO
YES
3. Travel expenses
- between workplaces
- if they have to take heavy tools
- if the taxpayer don’t have a regular fixed place of work (piano teacher)
- if work commence at home
STATUTORY DEDUCTIONS (division 25)
DIV. 25
1. Tax related deductions
s.25-5
- paid to a recognized tax adviser
2. Repairs
s.25-10
3. Lease document expenses
s.25-20
- preparation, registration or stamping
4. Borrowing expenses
s.25-25
- stamp duty for loan, application fees, valuation fees and broker’s fees
- deduction in the term of the loan (max 5 years)
- calculation: e.g. amount 500, loan period 5 years, days in first year 100
1 year: (500/1825 days in 5 years)x100 days=27.39
2 year: (473/1725 days left)x365 days
5. Mortgage discharge expenses
s.25-30
- expenses incurred to discharge a mortgage given as security
6.Bad debts
s.25-35
- the debt must be written off as bad during the year
-the debt must have been bought into account as assessable income
7. Losses by embezzlement (caused by theft, stealing)
s.25-45
8. Payments of pensions/retiring allowances (only if it can be shown to be in the future interest of the business)