# ATO: What you need to know about deductions



## Jack Malarkey (Jan 11, 2016)

From the Australian Taxation Office's Small Business Newsroom:


*What you need to know about deductions*









*25 May 2018*

When working out what business deductions to claim this tax time, it's important to remember the three golden rules:
*The money must have been spent for your business - not a private expense*
Most business expenses are deductible but you can't claim a deduction for private expenses, such as child care fees and clothes for your family.
*If it's a mix of business and private use, only claim the portion related to your business*
For example, if you bought a computer for your business and your kids use it to do their homework, that's a private use. You will need to work out how much of the computer use was for your business and only claim a deduction on that portion of the computer's cost.
*You must have a record to prove your expense*
Before you can claim a business deduction for an expense, you must:
have a paper or electronic record of the expense, for example, bank statements or receipts
be able to demonstrate how you calculated your claim - including working out the business portion of the expense.
Remember, registered tax and BAS agents can help you with your tax.

*Find out about:*

Business deductions

(https://www.ato.gov.au/Newsroom/sma...need-to-know-about-deductions/?sbnews20180613)


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## Who is John Galt? (Sep 28, 2016)

Jack Malarkey said:


> From the Australian Taxation Office's Small Business Newsroom:
> 
> 
> *What you need to know about deductions*
> ...


Thanks Jack. As is usual, and I am somewhat guilty of admitting also expected of you, you have provided first class information which is reasoned and researched and referenced.

I am having a few issues with my own tax agent at the moment, so I am a little reluctant to throw any more curve balls her way, however, I am wondering if you might have any idea about the following.

In the past, without difficulty and without question, I have been able to provide, umm.... let's say gratuities to pax, for example 'water and mints'. A cost of doing business, the same as any other input such as petrol. Obviously, costs are documented, receipts and invoices are kept and everything is squeaky clean. 

Gratuities, is probably not the right word but it perhaps leads to my question in regard to deductions. If a driver were to buy personal 'presents' for a well deserving or favoured pax, for example items of clothing, or more specifically lingerie, and if those items were clearly receipted and invoiced, would these costs be tax deductible the same as water and mints?

If so, and I cannot see any reason why they wouldn't be, I would also expect that it be fair and reasonable to be able to claim the costs of hotel accommodation for an afternoon or evening whilst the driver and pax were to discuss 'amongst other things' the best route to take.

Thanks Jack. I look forward to your insight.

.


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## Icecool (Feb 8, 2016)

Who is John Galt? said:


> Thanks Jack. As is usual, and I am somewhat guilty of admitting also expected of you, you have provided first class information which is reasoned and researched and referenced.
> 
> I am having a few issues with my own tax agent at the moment, so I am a little reluctant to throw any more curve balls her way, however, I am wondering if you might have any idea about the following.
> 
> ...


Who is John Galt? thanks for reaching out . Gifts are not tax deductible and it is not part of running the business as compare to the water and mints . It's call amenities. You can even take your paxs to expensive dinner dates or whatever but it's considered as an entertainment expense therefore you need to pay FBT on it . Which is about 50% tax . 
Again thanks you for reaching out . Anymore more questions regarding this matter please do not hestate To contact our forums members support team .


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## Who is John Galt? (Sep 28, 2016)

Icecool said:


> Who is John Galt? thanks for reaching out . Gifts are not tax deductible and it is not part of running the business as compare to the water and mints . It's call amenities. You can even take your paxs to expensive dinner dates or whatever but it's considered as an entertainment expense therefore you need to pay FBT on it . Which is about 50% tax .
> Again thanks you for reaching out . Anymore more questions regarding this matter please do not hestate To contact our forums members support team .


Thanks Icecool, this in indeed valuable input and I must admit I am a little disappointed in myself, as I know from experience that a desired outcome is so often achieved with the correct phraseology and terminology, and clearly my thoughts were clouded with the images of the circumstances I have described above.

It would appear that I hadn't thought this through, and it is always refreshing to be reminded that not only is the necessary information and guidance available, but others members are always willing and happy to share it.

I believe your use of the word amenities has given me the nudge I needed and it now seems that education, training, seminars and workshops are the key words here.

The ATO respectfully acknowledges the tax deductibility of these types of educational and training activities, and so plainly, all I need to do is have any intimate apparel invoiced as 'workshop materials' and the little excursions to a suite invoiced as seminars or conferences with workshop participation included. Pretty straight forward when you stop and think about it.

There are a number of industries which traditionally hold annual or bi-annual offshore conferences for their high achieving dealers, agents and others at the front line. The cost of putting these extraganzas together is also tax deductible as far as I'm aware, so there may be an opening for some very lucky pax to be invited to my very first offshore conference next June.

This little brainwave came to me recently when I had an events manager in the car and she insisted in providing an event of her own. Her presentation was compelling and there is no question that we can work together in bringing so many luck pax to a happy conclusion at the planned resort. A very talented lady indeed.

Of course this innovation in 'Above and Beyond' service for pax, is somewhat radical but will be necessitated by the expected huge Über earnings in 2018/19 and consequently the tax write offs required to bring tax down to a manageable level.

Whether or not our little fantasy island offshore adventure comes to pass remains to be seen, but with the enthusiasm and expertise shown by the events manager, she and I are having huge write offs in the meantime with our one on one workshops and seminars.

Good stuff.

Thanks for your earlier input  Jack


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## Icecool (Feb 8, 2016)

Who is John Galt? said:


> Thanks Icecool, this in indeed valuable input and I must admit I am a little disappointed in myself, as I know from experience that a desired outcome is so often achieved with the correct phraseology and terminology, and clearly my thoughts were clouded with the images of the circumstances I have described above.
> 
> It would appear that I hadn't thought this through, and it is always refreshing to be reminded that not only is the necessary information and guidance available, but others members are always willing and happy to share it.
> 
> ...


You got it !The running of seminars and the so call educational training is use by many professions like the high profile people . For example the CEO, lawyer, doctors ect where they held their conferences or seminars in an luxury location . They Use this an excuse it is for work related but at the same enjoy a tax deductible holiday . As for Uber they should held seminars or conferences in America or around the world annually like an extravaganza events and we are invite to attend .we can have a tax free holiday and at the same time learn to be a a good Uber drivers or meet people around the world .


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