Calculating tax deductions

1
Calculating tax deductions
In Australia the financial year is 1st July to
30th June. Depreciation of certain items are tax
deductible, eg job related computers, investment
properties etc. If an item is purchased during
the year it can only be depreciated for the
portion of the financial year that you own
it. For example a printer buys a printing press
on 1st October, they can only claim 9/12 of the
allowable deduction this year.
2
Example 1
Lara purchases a laptop on 31/1/05 for 2100. She
uses the declining balance method and a rate of
30 to depreciate her computer. a) How much
depreciation can Lara claim in the 04/05
financial year? b) How much depreciation can Lara
claim in the 05/06 financial year?
a) If purchased on 31/1/05 Lara can claim 5/12 of
the year. Depreciation during 04/05 5/12
2100 03
26250
b) Value at the beginning of 05/06 is 2100 ?
26250 Depreciation during 05/06 183750
03
183750
55125
3
Todays work
Exercise 9E page 275 Q1 to 6