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Eva works as an assistant accountant
Eva works as an assistant accountant. She is studying a bachelor's degree in accounting part-time at a local university. During the year ended 31 March 2021, she paid tuition fees of $23,000 to the university and examination fees of $4,000 to ACCA. She obtained a refund of $10,000 from the Continuing Education Fund in respect of the tuition fees she has paid. Eva's total amount of deduction under salaries tax for the year of assessment 2020/21 pertaining to the information given is:
Expert Solution
For the year 2020, the maximum amount that can be claimed as deduction is $4,000 while for 2021 the amount is zero or none.
Step-by-step explanation
The answers are different for 2020 and 2021. For 2020, the answer is $4,000 not because it is the amount of examination fees but it is the maximum amount claimable according to the law. The taxpayers usually use the Form 8917 in calculating deduction for tuition fees before, but according to this form, the taxpayer can no longer claim the deduction for qualifying expenses paid after 2020 because the credit was not extended. This means that, for the 2021 tax year, taxpayers cannot claim the tuition and fees deduction.
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