Hi. I recently signed up with the nab and westpac balance transfer offers, and put the money into my ubank to earn some interest. Both cards have annual fees of $30 and $45 respectively. Would I be able to claim them as a tax deduction as they were expenses incurred in earning interest? I only signed up for the balance transfer deals to put it in the bank, not to pay off any debt. Thanks.
Claiming credit card annual fee as tax deduction?
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Comments
In long, no.
In summary, no.
Tl;dr, no.
In gangster, hell no.
You can claim what you want, whether the tax office accepts it if you are audited is a different matter!
Card fees are claimable where the card is used for business expenses, and you can attribute the fee based on the percent of business use (e.g. 60% of the fee claimable) so I can see your argument.
I am not aware of a rule that says you cannot make such a claim, but would be happy to be corrected.
I think the question is that you are using the finance facility in the opposite way to what has traditionally happened, so there is a inclination to say no.
My view would be if you borrowed money to buy a house or invest in shares, you would be able to claim the borrowing costs and interest as a deduction.
This is really what you are doing here too.
Assuming you make no personal purchases and use the cards only for the purpose of investment, it looks like a legitimate expense to me, and so a legitimate claim.
You could possibly have issues if the original balance was accrued via purchases etc, but if it was a cash advance you used to invest, it would seem ok.Great question, and note I am in no way a pro at tax advice.
Thanks for your informative reply. I guess I won't claim it then, since the general consensus is no. $75 isn't that much anyway, I'd rather not get audited over it.
if it's a 100% income generating account, can you claim 100% deduction.
if you use it 20% for income generation (e.g. you do personal shopping but also have cash in there for earning interest), then you can claim 20%.
In short, no.