myTax 2019 Cost of managing your tax affairs

Complete this section if you incurred expenses in managing your tax affairs.

Essentials

You may be able to claim a deduction at this section for expenses you incurred for:

• expenses for managing your tax affairs, including fees paid to a recognised tax adviser for doing your tax return
• litigation costs, including court and Administrative Appeals Tribunal fees
• interest and other charges we imposed on you

You can also claim any costs you incurred in 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 expense is deductible in the year you incur the charge.

Recognised tax adviser

A recognised tax adviser is a registered tax agent, barrister or solicitor.

You can see a list of registered tax agents at Tax Practitioners boardExternal Link or call 1300 362 829.

Depreciation and capital expenses

Individual taxpayers generally can't immediately deduct spending on items costing more than $300; instead you claim the cost over time, reflecting the asset's depreciation (or decline in value).

Depreciation claims need to meet the following conditions:

• you must apportion your claim to reflect the percentage that the asset was used to manage your tax affairs
• you must have directly incurred the cost of the asset and it was not reimbursed.

You can use the Depreciation and capital allowances tool to work out any decline in value deduction as well as any deductible balancing adjustment when you stop holding a depreciating asset.

The tool can be accessed in the Deductions section on the Prepare return screen.

Completing this section

We pre-fill your tax return with cost of managing your tax affairs information provided to us. Check for costs of managing your tax affairs not pre-filled and ensure you add them.

1. For each cost of managing tax affairs expense not pre-filled in your tax return, select Add.
2. Select the Type of deduction and enter information into the corresponding fields.
3. Select Save.
4. Select Save and continue.

Note: If you used the Depreciation and capital allowances tool, fields containing information from the tool cannot be directly adjusted in myTax. To make any adjustments to this information, or to add new assets to the tool, select the 'Use the depreciation and capital allowances tool' link.

Eligible expenses

This section shows expenses that you can and cannot claim.

Interest and other charges

You can claim a deduction for interest or other charges that we imposed on you for:

• 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.
• amounts that we imposed on you for underestimating a varied GST or PAYG instalment.

You cannot claim:

• tax shortfall and other penalties for failing to meet your obligations.
• any judgment debt interest that may arise for a court case involving your tax affairs.

For more information about interest charges that we imposed on you, see ATO interest - calculation and reporting.

Litigation costs

You can claim a deduction for the litigation costs you incurred in managing your tax affairs.

Litigation costs include court and Administrative Appeals Tribunal fees, and solicitor, barrister and other legal costs you incurred in managing your tax affairs.

Other expenses incurred in managing your tax affairs

You can claim a deduction for other expenses incurred in managing your tax affairs including:

• the preparation and lodgment of your tax return and activity statements, including costs associated with:
  • buying tax reference material
  • tax return preparation courses
  • 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. You must apportion the cost of the software if you also used it for other purposes
   
• travel to obtain tax advice from a recognised tax adviser
• obtaining a valuation needed for a deductible donation of property or for a deduction for entering into a conservation covenant; for more information see Gifts of property.

You cannot claim:

• the cost of tax advice given by a person who is not a recognised tax adviser.

Expenses relating to another person’s tax affairs

You can claim a deduction for 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.

These myTax 2019 instructions are about expenses you incurred in managing your tax affairs.