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Edited version of private advice
Authorisation Number: 1052035474670
Date of advice: 20 September 2022
Ruling
Subject: Deductions
Question
Is the tax agent fee paid for the USA tax lodgement tax deductible in the Australian Tax Return?
Answer
Yes
Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent that they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income.
Section 25-5 of the ITAA 1997 allows a deduction for tax-related expenses:
Tax-related expenses
1. You can deduct expenditure you incur to the extent that it is for:
(a) managing your tax affairs
This ruling applies for the following periods:
Year ending 30 June 20XX
Year ending 30 June 20XX
Year ending 30 June 20XX
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
In March 20XX you instructed XX Inc (Tax Agent in the USA) to prepare your USA tax lodgments. This included investment income from the USA and salary and wages from Australia.
You are a permanent resident of Australia for tax purposes.
You are required to prepare a USA tax return with your income and deductions from Australian sources plus investment income and deductions from the USA.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Income Tax Assessment Act 1997 Section 25-5