Question

Melissa, an Australian resident, is a perioperative nurse employed full-time in the operating theatre at her local public hospital. In addition to this she also works at the local private hospital assisting orthopaedic surgeon Dr Harris on a contract basis. Dr Harris pays Melissa directly for her services.

In September 2019, Dr Harris asked Melissa to accompany her to Chicago in the United States to attend a week-long conference to learn new techniques for use during orthopaedic surgery. Dr Harris paid for Melissa’s conference registration fees, return airfares from Sydney to the United States and her accommodation and meals for the week.

At the conclusion of the conference, Melissa travelled from Chicago to New York where she stayed for an additional three weeks at her own expense. She stayed in a hotel which included breakfast and she ate out for lunch and dinner.

During the first two weeks she worked at the New York-Presbyterian Hospital, one of the largest teaching hospitals in the United States as part of an exchange program. Her employer, the public hospital in Australia, paid her usual wages for these two weeks. During this time she was able to assist with a number of surgeries working alongside some of the world’s top surgeons where she gained invaluable experience. Melissa took a cab from her hotel to the hospital each day to perform the work.

Melissa spent the last week of her two-week stay in New York sightseeing and catching up with friends. She flew back to Australia from New York using the ticket that had been paid for by Dr Harris.

Required

Advise Melissa of any amounts she may be able to claim as income tax deductions in relation to her trip to the United States (Australian Tax Law).

Answer should write on ILAC style of essay writing and Names of cases or statutes should be italicised, and followed by the jurisdiction not in italics, for example: Acts Interpretation Act 1901 (Cth).  

Answer 1

Yes,Melissa will be able to claim as income tax deductions in relation to her trip to the United States

Claiming a tax deduction for business travel expenses

As a business owner, the general rule is that you can claim deductions for expenses if you or your employee are travelling for business purposes. A travel diary is:

• compulsory for sole traders and partners in a partnership to record overnight business travel expenses
• highly recommended for everyone else.

Expenses you can claim

Your business can claim a deduction for travel expenses related to your business, whether the travel is taken within a day, overnight, or for many nights.

Expenses you can claim include:

• airfares
• train, tram, bus, taxi, or ride-sourcing fares
• car hire fees and the costs you incur (such as fuel, tolls and car parking) when using a hire car for business purposes
• accommodation
• meals, if you are away overnight.

Expenses you can't claim

You can only claim the business portion of business travel expenses. You must exclude any private expenses, such as:

• a holiday or visit to family or friends that is combined with the business travel
• the expenses associated with you or your employee taking a family member on the trip
• souvenirs and gifts
• sightseeing and entertainment
• visas, passports or travel insurance
• travel expenses that arise because you are relocating or living away from home
• travel undertaken before you started running your business.