Jack receives his electricity bill on 20 June 2021. Assume that Jack uses the electricity to power his business 100%. (Why is this important?). The amount of $1,200 is due for payment on 10 July 2021. Jack pays his electricity bill on 2 July 2021.

When is the outgoing incurred? Would your answer be the same if Jack was paying his car registration for the next 12 months? Why?

Question 2

Discuss whether the following would be deductible under Section 8-1 of the ITAA (1997).

Internet bill dated 18 June 2021 for $200 where the taxpayer was able to establish a pattern of usage showing that it was used 100% for business.

Mobile phone bill dated 8 June 2021 for $130. The phone was used for calling family members.

ASIC fee invoice dated 12 June 2021 for $100 in respect of the registration of a new business name.

Question 3

Tony is a successful doctor. He runs a practice in North Sydney. He has the following items in his waiting room and wants your advice:

Woman's day magazines for clients to read; Flowers to freshen up the roomand cups for water cooler.

Can Tony's business claim these items as a tax deduction?

Question 4

Discuss whether the following would be deductible under Section 8-1 of the ITAA (1997).

A manager of a production business travels to Hong Kong to buy a machine. The machine is worth $1million. The travel costs including accommodation is $15,000.

Question 5

Discuss whether the following outgoings would be allowed as a tax deduction.

A police officer washes her police uniform.

A school teacher wears a $200 pair of sunglasses whilst on playground duty.

 

The cost incurred by an employee accountant in buying a suit compliant with the employer's dress code worn to impress clients, so they can gain more clients.

Answer rating: 100% (QA)

Question 1 The outgoing for the electricity bill is incurred when the electricity is used to power J... View the full answer