Review Of Are Tax Attorney Fees Deductible Nsw 2023

When are attorney fees tax deductible On what basis? from thelawadvisory.com

Are Tax Attorney Fees Deductible in NSW?

Introduction

Tax laws can be very complicated, and sometimes you might need to hire a tax attorney to help you with your tax issues. However, hiring a tax attorney can be expensive, and you might be wondering if you can deduct the fees on your tax return. In this article, we will discuss whether tax attorney fees are deductible in NSW.

Tax Attorney Fees

Tax attorney fees are the fees you pay to a tax attorney for legal advice or representation related to your taxes. These fees can include fees for preparing and filing tax returns, representing you in an audit or appeal, or providing legal advice related to your taxes.

Deductibility of Tax Attorney Fees

In NSW, tax attorney fees are generally deductible if they are incurred for the purpose of producing assessable income or carrying on a business for that purpose. This means that if you hire a tax attorney to help you with your business taxes, you can deduct the fees on your tax return.

Limitations on Deductibility

However, there are some limitations on the deductibility of tax attorney fees. First, the fees must be directly related to the production of assessable income or carrying on a business for that purpose. This means that if you hire a tax attorney for personal tax advice, the fees are not deductible.

Secondly, the fees must not be capital, private or domestic in nature. This means that if you hire a tax attorney to help you with the purchase or sale of a property, the fees are not deductible.

Thirdly, if the fees are incurred in relation to a tax dispute or litigation, they are only deductible if the dispute or litigation relates to the production of assessable income or carrying on a business for that purpose.

How to Claim the Deduction

If your tax attorney fees are deductible, you can claim them on your tax return as a deduction against your assessable income. You should keep records of the fees you paid and the purpose for which they were incurred.

Conclusion

In conclusion, tax attorney fees are generally deductible in NSW if they are incurred for the purpose of producing assessable income or carrying on a business for that purpose. However, there are some limitations on the deductibility of these fees, and you should keep records of the fees you paid and the purpose for which they were incurred. If you are not sure whether your tax attorney fees are deductible, you should consult with a tax professional.

Share :