Doing Tax On Your Mac? You Could Claim Windows As A Deduction

The Australian Taxation Office (ATO) has promised there will be a Mac version of e-tax next year, but for your 2011-2012 tax return Windows is the only option. That has the odd consequence that you might be able to claim the cost of Windows and emulation software if you're planning to use e-tax to submit your return, but you will need to plan carefully and document your choices.

Picture by Justin Sullivan/Getty Images

As we reported last month, the ATO has said it will end its longstanding Windows-only policy with the e-tax 2013 release. That's good news for your next tax return, but it's no help with the current one.

You can run e-tax using a virtualisation platform such as Boot Camp, Parallels, Fusion or VirtualBox. It's not an officially supported approach — if there are any submission issues, that's your problem — but many users have reported running e-tax successfully this way.

One interesting quirk of the current approach is that it theoretically makes it possible to try and claim the cost of running a virtualised platform as a deduction, since it's effectively an expense you incurred to submit your tax (just as paying an accountant would be). Many of the most popular virtualisation/emulation solutions themselves are free — Wine for Linux falls into this category along with most of the Mac choices — but you still need to pay for a Windows licence to use them. As the ATO explains on its site, you might be able to claim those costs back:

The cost of software, such as emulation software or a Windows operating system, purchased and used to allow the completion and lodgment of your tax return via e-tax, is tax deductible. It is important to note that you can only claim that portion of the cost that is related to preparing and lodging your return or managing your tax affairs. If you use this software for other purposes you must apportion your claim.

It's not yet clear whether this policy might be changed when a Mac version becomes available. In practice, that seems unlikely: while the ATO might question unusual costs, it doesn't dictate that (for instance) all businesses must buy the cheapest laptop.

However, before you start salivating over the prospect of a deduction, remember three things. Firstly, a deduction doesn't mean you get the software for nothing: it simply lowers your taxable income, which might lower your total tax assessment.

Secondly, as the note above makes clear, if you use Windows on your Mac for purposes other than e-tax, you can't necessarily claim the entire cost; you're meant to apportion a reasonable amount.

If you're working as an IT professional, it won't be difficult to argue that you needed Windows for other purposes, and given the relatively small amounts involved, it seems unlikely the ATO would bother questioning that expense unless your deduction total is unusually large. But if you do get audited (and remember, IT professionals are a target occupation this year), you need to be able to justify the expense if questioned. (This rule is also why PC owners would struggle to claim the price of Windows as a cost of doing their tax; it's not convincing to argue you use a machine solely for that purpose.)

Thirdly, bear in mind you'll need to claim the cost in the income year where the expense was incurred. If you buy a copy of Windows now to submit your tax electronically, you won't be claiming that until the next return.

Check out our Tax Week 2012 coverage for updates on what's new this year in tax. As ever, if you need specific tax advice, speak to a qualified and accredited professional.

Evolve is a weekly column at Lifehacker looking at trends and technologies IT workers need to know about to stay employed and improve their careers.


Comments

    As I said last time, they should NOT be developing a Mac version. They should be producing a web version that is platform neutral (so no flash or silverlight etc).

    Properly done web eTax= OS compatibility issues gone, and less development time needed than for dedicated versions for each OS.

      You might not have thought it through. It's easy to say "let's build a web app to do this!" but can you imagine the security risks the government would have to explore? What about ddos? Then there's all the testing that's involved, it'll need to run on every platform, under every browser.

      These issues are mitigated by having OS specific apps. For something that I spend 1 hour each year using I don't mind having a dedicated OS app. There are places where building a webapp makes sense, but there are times where it's silly and this is one of them.

        I thought it through.

        Think about what *other* systems we already use/access via web apps: banking, shopping, medicare, centrelink etc. If these can overcome the issues relating to security and testing you mention, why not etax?

        Can you even say the current form of eTax means that there are no risks of security or DDOS? After all, when you use eTax you are sending your tax details somewhere. What if that somewhere was compromised? What if it was hit by DDOS?

        You mention testing. Can you honestly say that a web app developed from the ground up to be standards compliant and to avoid the use of technology that is platform specific would need more testing than creating dedicated apps? How many versions of Windows are there again? OSX? What about linux?

        No, I think it makes plenty of sense.

          Also, it seems the ATO do acknowledge that a web-based version may be the future for etax:

          http://www.ato.gov.au/individuals/PrintFriendly.aspx?ms=individuals&doc=/content/73931.htm

          "We are also investigating, as a longer term solution, a move to a web-based e-tax product. One of the major considerations in doing this will be balancing the need for greater usability and our security requirements to ensure that taxpayer information is protected - particularly with mobile computing devices."

            Yes, longer term, do you honestly expect them to have a system in place within a year to handle all the logic as complicated as doing your tax return?

            Your counterpoint regarding DDOS is not what I was referring to. If the server is ddosed that just means you can't submit your tax return, you can still file it locally. Can you imagine the number of people trying to do their tax returns during the first week of the financial year?

            Tbh, I am all for web apps to do everything. But you need to be realistic, if you had a system that has been thoroughly tested for over a decade would you be inclined to move? Long term, yes, you should, but the short term solution would be to invest into having a app that runs on OS X. It shouldn't be that hard I'd imagine, they should be able to wrap WINE around it.

            I think we can agree that a web app is the way to go, it's just how to get there that we disagree with.

              The ATO has many other systems they support, internal and external, and e-tax is only one small application in the grand scheme of things. Most system changes and intiatives are funded by legislative changes and who knows what will happen after the next federal election?

              To redevelop a system to lodge tax returns via a browser will require a major redesign of architecture, infrastructure, and is hard to justify funding when there is an existing application. In the meantime, port to a mac version to cover more taxpayers, then look at redeveloping when funding is available.

              There is apparently a new website on the way for individuals to do various tasks without having to call up or send in forms, so who knows what their plan is to build something into that?

    Also, here's an idea, shared by quite a few people around the internet.

    1. download trial of VMWare Fusion for Mac
    2. install Windows 8 preview
    3. install e-tax
    4. lodge tax
    5. stop whining until next financial year

    @Anonymoose or you could keep it a bit lighter

    1. Download Virtualbox (freeware)
    https://www.virtualbox.org/wiki/Downloads

    2. Download Windows XP Virtual PC VHDs (only 350mb)
    http://www.microsoft.com/en-us/download/details.aspx?id=11575

    3. Follow this guide to install
    http://danielmcormond.com/2011/02/21/how-to-use-microsoft-ie-vpc-images-with-virtualbox-on-mac-os-x/

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