This question is about:
- expenses you incurred* in managing your tax affairs, including fees paid to a recognised tax adviser for doing your tax return
- an interest charge we imposed on you
- amounts we charged to you for underestimating a varied goods and services tax (GST) instalment or pay as you go (PAYG) instalment
- expenses for complying with your legal obligations relating to another person's tax affairs.
*You incur an expense in the income year when:
- you receive a bill or invoice for an expense that you are liable for and must pay (even if you don't pay it until after the end of the year)
- you do not receive a bill or invoice but you are charged and you pay for the expense.
The cost of 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 adviser
- 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; see Gifts of property in Special circumstances and glossary for more information.
Expenses for the preparation and lodgment of your tax return and activity statements include costs associated with:
- buying tax reference material
- lodging your tax return through a registered tax agent
- obtaining tax advice from a recognised tax adviser
- dealing with us about your tax affairs
- purchasing software to allow the completion and lodgment of your tax return via e-tax. You must apportion the cost of the software if you also used it for other purposes.
Fees paid to a recognised tax adviser are deductible in the year you incur them. A recognised tax adviser is a registered tax agent, barrister or solicitor. A list of registered tax agents can be found at www.tpb.gov.au or you can check with the Tax Practitioners Board on 1300 362 829.
You cannot claim for the cost of tax advice given by a person who is not a recognised tax adviser.
You can claim a deduction for an interest charge that we imposed on:
- the late payment of taxes and penalties
- the amount of any increase in your tax liability as a result of an amendment to your assessment
- the amount of any increase in other tax liabilities, such as GST or PAYG amounts.
The expense is deductible in the year you incur the interest charge.
However, you cannot claim tax shortfall and other penalties for failing to meet your obligations.
You can claim amounts that we imposed on you for underestimating a varied GST or PAYG instalment.
You can claim any costs you incurred in complying with your legal obligations relating to another person's tax affairs. This includes:
- complying with the PAYG withholding obligations, for example, where you withheld tax from a payment to a supplier because the supplier did not quote an Australian business number
- providing information that we requested about another taxpayer.
Add up the costs of managing your tax affairs.
Write the total at M item D10.
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