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Tax Deductions for Legal Expenses for Recovering Unpaid Wages

Newbie

Views 2781

Replies 6

I have initiated legal action to recover unpaid wages for 2012 to 2017.  My lawyer says it might take up to three years to get an outcome.  Meanwhile I will be incurring legal costs. 

 

Do I claim legal expenses for recovering unpaid wages as a tax deduction in (a) the financial year they are incurred (b) in the financial year I recover the unpaid wages or (c) do I claim a portion for each financial year from 2012 to 2017 and amend my Tax Returns accordingly?

 

When I recover the unpaid wages, should I (a)  amend my 2012 to 2017 tax returns to reflect the year the unpaid wages relate to or (b)  declare the income in the financial year I recover them?  Thanks.

 

 

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Taxicorn

Replies 5

(b) In the year that you receive them.

 

(b) You should receive them as a Lump Sum E (payments in arrears), you then let the ATO know over how many years they cover so you can receive a tax offset to ensure correct taxation.

 

6 REPLIES 6

Most helpful response

Taxicorn

Replies 5

(b) In the year that you receive them.

 

(b) You should receive them as a Lump Sum E (payments in arrears), you then let the ATO know over how many years they cover so you can receive a tax offset to ensure correct taxation.

 

Anonymous

Replies 4

@macfanboy

 

You still spending a lot of your time on here ???     

 

The weather is picking up, the fishing is great .... surely you have much better things to do ??

Taxicorn

Replies 3

@Anonymous

Believe it or not it relaxes me....Smiley Very Happy

 

But yes I do need to get a life....Smiley LOL

 

Anonymous

Replies 0

@macfanboy

 

During colder months it can be entertaining on here .....  Smiley Surprised

 

You know the old saying you cant avoid death and taxes ... but you can avoid this   Smiley LOL

 

Newbie

Replies 1

Thanks, I appreciate the advice, MacFanBoy.

 

Fishing is also good relaxation Smiley Happy

Anonymous

Replies 0

@Hugo @macfanboy

 

Fishing is much better relaxation ..... its awesome ... 👍