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Tax office will let you deduct virtualisation software

Want to use e-tax on a Mac? Australian Tax Office says you can deduct virty software

Bridging the IT gap between rising business demands and ageing tools

The Australian Taxation Office's (ATO's) e-tax software doesn't run on Macs, which has long been a grumpiness-inducer for those who like their computers fruity and their tax affairs digital.

But the ATO now has a cost-effective way out: run Windows in a virtual machine, run e-tax in that VM and then – this is the good part – write off the cost of the virtualisation software and the guest operating system as a tax deduction.

We're not making this up: the ATO has even put it in writing on this page, which states:

E-tax is not compatible with computers running Linux or Apple Mac operating systems. However, e-tax has previously been tested successfully on an Apple computer running OS X v10.6.3 with VMWare Fusion 3, Parallels Desktop 5 and Boot Camp software, running a recommended Windows operating system.

The page goes on to say that some Linux users have successfully run e-tax in WINE.

Now for the good bit: the page adds that if you chose to go down the virtual path:

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.

There is one fly in the ointment: the ATO will only let you deduct “... 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.”

Windows 7 Home Premium Upgrade costs $199 and VMware Fusion 4 is sold for AUD$54.95 in the Australian Mac App store, so there's not a huge saving on offer. For those in business who like the idea of the deduction, better value may be on offer if you nip out and buy a Windows $300 netbook and then take advantage of the laws allowing full depreciation of assets in the year of their purchase. The cashflow hit will be a little harder, but you'll probably get more of a deduction*, and will end up with a whole computer.

The Reg suspects some Mac users may nonetheless walk the virtual path and take a very long time to get last year's tax affairs in order. ®

* We're pretty sure you'll get more, but please don't rely on this as financial advice.

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