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Edited version of your private ruling
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Ruling
Subject: Cost of managing tax affairs
Question
Are you entitled to claim a deduction for the cost of a tax return preparation course?
Answer
Yes.
This ruling applies for the following period
Year ended 30 June 2011
The scheme commenced on
1 July 2010
Relevant facts
You have taken a course provided by a tax agent to learn how to prepare income tax returns.
You had no intention of working as a tax consultant when you enrolled in the course; you undertook the course so that you could complete your own tax returns.
However you changed your mind on completion of the course when you received an offer to work as a tax consultant.
You incurred expenses of approximately $X00 to attend this course
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 25-5
Reasons for decision
Section 25-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that certain tax-related expenses are deductible.
Paragraph 25-5(1)(a) of the ITAA 1997 provides that a taxpayer can deduct expenditure they incur to the extent that the expenditure is for managing tax affairs.
Section 25-5 of the ITAA 1997 does not specify what constitutes managing tax affairs. However, it is considered that it includes activities required to prepare income tax returns.
In your case, you attended a tax return preparation course which provides you with information to assist you in preparing your tax return. You did not attend the course with the intention of obtaining employment as a tax consultant.
It is considered that the course is in relation to managing your tax affairs as it is associated with the preparation of your tax return. Therefore, you are entitled to a deduction for the cost of the tax return preparation course under label D10.