A taxpayer can claim a deduction for expenses they incur in managing their own tax affairs. These expenses will be deductible in the year they are paid.
The deductible expenses include:
- The cost of travel to obtain tax advice. This can be calculated on the cents per kilometre basis if the taxpayer’s own vehicle was used to visit the accountant’s office. Or alternatively, the out of pocket transport cost incurred, such as the taxi fare, will be deductable.
- Costs of preparing and lodging tax returns, business activity statements, or tax advice received from a registered tax agent, barrister or solicitor.
- Tax reference books, materials, and subscriptions.
- Legal expenses and costs incurred in appealing to the Administrative Appeals Tribunal or Courts in relation to tax affairs.
In contrast, the non-deductible costs of managing tax affairs include:
- Fees paid to non-registered tax agents.
- Advice and costs in relation to exempt income.
- Tax advice in relation to non-taxable income.
Under no circumstances should a taxpayer allow anyone to prepare their tax return or business activity statements unless they are registered with the Tax Practitioners Board. A person’s tax agent registration or business activity statement registration can be verified at the Tax Practitioners Board.