Question

Joanne asks you whether the outgoings listed below are allowable deductions. Joanne recently completed her medical degree and took up employment in Newcastle Base hospital. The following outgoings were incurred by her during the 2018-2019 income year:

1.   Travelling to Newcastle for the job interview $300;
2.   Moving from her home in Canberra to relocate to Newcastle $3,000;
3.   Purchase of compulsory doctors’ whites uniform to wear at work $600;
4.   Child care expenses for her two-year-old daughter $15,000;
5.   Travelling from Newcastle hospital to Newcastle CBD for a second job as a waitress in a restaurant $4,000;
6.   Purchase of meals at the hospital before travelling to the Newcastle CBD to commence the second job $600; and
7.   Speeding fine incurred on her way from Newcastle hospital to the Newcastle CBD to commence the second job $500.

Advise Joanne on whether or not the outgoings are tax deductible. Your answer must be supported by legislation, case law and tax rulings (if any).

Answer 1

1.Prior to 2017 travelling expenses for job seeking were tax deductable. But, In the current year it is not tax deductable.

2.From the beginning of year 2018, The moving expenses are not deductable till year 2025. So, these expenses are non tax deductable.

3.Compulsary white uniform expenses are tax deductable as it meets the conditions

Conditions are - its compulsory to wear the uniform and it can't be weared outside the working area.

4.Child care expenses are tax deductable if it complete alll the test which are required to claim under form 1040.

5.As discussed earlier the travelling expenses for job seeking are non tax deductable.

6.Purchase of meals is also included in travelling expenses .So, it is also non tax deductable.

7. According to the Provisions of Income-Tax Act , if a person is penalised for voilating a law, the penalty paid for it is now not tax deductable. So, the speeding fine is non tax deductable.