Question 5

Required: For the transactions below, assuming that such amounts are deductible under section 8-1, discuss what deductions are available for the 2022-23 tax year (citing authority where appropriate) (4 marks).

Karla runs an accounting practice as a sole practitioner, which has an annual aggregated turnover of $2 million. On 1 May 2023 she incurs the following expenses:

$600 for a 3-year subscription to a monthly journal that discusses accounting practice matters (the subscription is effective from 1 May 2023 to 30 April 2026).

$5000 for a contract to have her office cleaned. This contract covers the period 1 May 2023 to 10 April 2026.

$2000 for access to a tax database, which gives access for the period 1 May 2023 to 31 December 2023.