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How to depreciate a Newspaper Subscription

Newbie

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Hi,

 

I am trying to figure out how to accurately depreciate a Newsper Subscription for my professional library. The traditional model for a professional library is to depreciate the asset over 3-10 years (from what I've read), however, a newspaper depreciates nearly instantly. Thus, would I be able to say the asset depreciates over 1 year?

 

Thanks,

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Community Support

Replies 6

Hi @Wolverine

 

Subscriptions to technical, scientific, trade, business or professional journals, information services, newspapers and magazines are deductible, provided the subscriptions relate to the production of your assessable income.

 

A professional library has an effective life of longer than one year and you can continue to refer to the publications in it, whereas a newspaper publication has a very short life. So, a newspaper subscription would not be depreciated.

 

The cost of newspapers may be deductible to the extent of work-related use and claimed in the year of the expense. There is information about deductions books, periodicals and digital information on our website.

 

I hope this helps

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Most helpful response

Community Support

Replies 6

Hi @Wolverine

 

Subscriptions to technical, scientific, trade, business or professional journals, information services, newspapers and magazines are deductible, provided the subscriptions relate to the production of your assessable income.

 

A professional library has an effective life of longer than one year and you can continue to refer to the publications in it, whereas a newspaper publication has a very short life. So, a newspaper subscription would not be depreciated.

 

The cost of newspapers may be deductible to the extent of work-related use and claimed in the year of the expense. There is information about deductions books, periodicals and digital information on our website.

 

I hope this helps

Newbie

Replies 5

Hi Tracey,

Thanks for the information.

To be clear, the subscription would be about $90-$100 per month for the AFR. Since this would be more than the $300 deduction limit, wouldn’t I need to claim the deduction based on the decline in value? How would I do this for a newspaper?

Thanks

Newbie

Replies 4

I believe the $300 limit you are referring to is the limit for an immediate deduction of a depreciable asset for an individual taxpayer. If the ATO has said a newspaper subscription is not a depreciable asset but rather a work related expense, then this particular limit would not apply. 

 

For example, if you purchased a computer during this tax year for $500 you cannot deduct the full amount in this tax year, and you would need to depreciate it over its effective life. However, if you paid $500 in union fees, you can deduct those in their entirety in the current income year because they cannot be depreciated (they have no effective life). 

 

The only other limit you may be thinking of is that you have a limit of $300 worth of work related deductions before you need to substantiate them with written evidence. Therefore, if you are claiming more than $300 in deductions, then you must ensure you have written evidence (e.g. receipts). 

 

Newbie

Replies 3

Great - thanks for that.

So in the tax return filing, how do I do this? I imagine it’s in other work related expenses, then include the FY cost (12*$99), and the decline in value is 100% over 1 year? Then would I just need to provide the receipts and a reason as to why it is directly associated with my income?

Many thanks

Newbie

Replies 2

Yes, that’s right, if it’s a paper return or done by a tax agent it’s usually labelled D5 - other work related expenses, but online through my tax there is no number system just a heading for other work related expenses. If there is room to enter the type of expense then just note ‘newspaper subscription’ and the full amount relating to this tax year. There is no need to explain anywhere on the return the connection to work, as long as you understand how it is connected. You just need the receipts for your own records, not to submit. Good luck!

Newbie

Replies 1

Thanks heaps!

Newbie

Replies 0

Hi, 

So I'd just like to try get an understanding for how much you receive for claimed other work expenses.

 

For example, say the highest income tax bracket for a given individual is 32.5% and the newspaper subscription is $1200 pa. Would this be reduced from the individuals income thus providing a approximate discount of 32.5% on the subscription or would more than that be refunded?

 

Thanks

Community Support

Replies 0

Hi @Wolverine

 

Deductions reduce your taxable income which essentially will reduce the amount of tax you're required to pay.

 

Thanks, Ari