Wednesday, 28 August 2013

Tax tips, part 12: cost of managing tax affairs

Costs related to managing your tax affairs are understandably tax deductible.  You can also claim costs in complying with your legal obligations relating to another person's tax affairs (which are even more understandably deductible!).  These deductions get claimed at section D10 of your tax return.

What you can claim

Four general types of costs can be claimed in section D10:
  1. Expenses you incurred in managing your tax affairs
  2. Expenses for complying with your legal obligations relating to another person's tax affairs
  3. Any interest charge the ATO has imposed on you
  4. Any amounts the ATO charged to you for underestimating a varied GST or PAYG instalment 
Expenses you incurred in managing your tax affairs can include:
  • The preparation and lodgment of your tax return and activity statements
  • Travel to obtain tax advice from a recognised tax advisor
  • Appeals made to the Administrative Appeals Tribunal or courts about your tax affairs
  • Obtaining a valuation needed for a deductible donation of property or for a deduction for entering into a conservation covenant