Private ruling: Cost of managing tax affairs
Published: December 2011
Ruling period: Year ended 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Are you entitled to claim a deduction for the cost of a tax return preparation course? | A1: Yes.


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 25-5

Reasons for decision: Summary: 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.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | 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