Level: Professional
Cost:
$199 members
$320 non-members
Estimated learning duration: 10 hours
Assessment duration: 2.5 hours
Assessment: Part 1: 20 multiple choice questions 75% pass mark
Part 2: 3 scenarios with 3-4 multiple choice questions per scenario 75% pass mark
Assumed knowledge: There is no tax technical knowledge assumed in order to successfully undertake this unit.
It is advised that your learning in this unit will be enhanced if you already understand how income is assessed to tax in Australia. This information is included in the Taxation of income unit.
In this unit you will learn about the conditions that must be satisfied in order for a taxpayer to deduct outgoings and expenses from assessable income to arrive at taxable income. You will also learn about the core rules which prevent such income tax deductions so that you are able to understand which deductions can and cannot be claimed against assessable income.
In this section you will learn about how the income tax deductions regime fits within the broader income tax law environment. You will also be introduced to the key sources of law and ATO guidance that are relevant to the determination of income tax deductions. As an introduction to the content covered in later sections you will gain a high-level overview of the income tax deductions regime in this section.
Working with the starting point in the legislation for general deductions is fundamental for tax practitioners. Understanding how it operates will be a critical learning from this section of the unit. The law on general deductions is also heavily reliant on the decisions of the courts over many years. You will be introduced to key decisions in this section. Determining whether or not an income tax deduction is available is extremely important for taxpayers. You will explore these provisions carefully in this section.
Once it has been established that you have a general deduction, it is important to establish the correct tax period in which to deduct it from assessable income. You will learn about the rules that are applied to determine when the deduction is incurred for tax purposes with key case law decisions being referenced in this section. There are certain special rules that apply when payments are made in advance in certain circumstances, you will learn about these prepayments' rules in this section also.
This section will explore the way that deductions for interest payments on borrowings are dealt with under the law. This is another area where important case decisions have determined the principles to be applied. The key ones are discussed in this section. You will explore interest incurred pre-commencement of business activity and post-cessation of business activity.
In addition to general deductions, there are a range of deductions where the income tax law makes specific provisions for amounts to reduce assessable income. This section introduces the provisions about repairs, borrowing expenses and bad debts as well as enabling you to learn where to find the range of other deductions provisions in the law.
It is important to understand the scope of deductions that are available to employees that can be deducted from their salary and wages derived in relation to their employment – these are known as work-related deductions, and you will learn about the key ones in this section. Travel, motor vehicle expenses, work-related clothing and its cleaning, self-education expenses and home office expenses are all discussed here while also introducing the key case decisions and ATO guidance on the topics.
There are a number of reasons why an income tax deduction might not be available to the taxpayer. In this section you will learn where to find the provisions that operate to prevent this, exploring travel to residential rental properties, entertainment expenses and the non-commercial business loss rules in some additional depth.
