With most universities now back hard at the study and attending classes, it is a great time to look at the available tax deductions for your self-education expenses which you have and will incur into the future.
What are Self-Education Expenses?
These are expenses incurred in relation to courses provided by a school, college, university or other training provider that you personally undertake. You must be undertaking this course to gain a formal qualification in your current profession, business or trade in order to be eligible for any tax deductions.
You can only claim if there is a direct connection between the course you studied and your employment at the time
According to the ATO, you must satisfy ONE of these four conditions.
You need to be:
- Upgrading your qualifications for your current role.
- Improving your skills or knowledge used in your current role.
- A trainee and the course you take forms part of the traineeship.
- Able to show the course you were taking led to, or was likely to lead to, an increase in your current salary.
You cannot claim expenses if your intention is to change to a different job or you are looking at obtaining money from different income stream eg starting a new business
Expenses you can claim
You can claim the following expenses in relation to your self-education:
- accommodation and meals (if away from home overnight)
- computer consumables
- course fees
- decline in value for depreciating assets (cost exceeds $300)
- purchase of equipment or technical instruments costing $300 or less
- equipment repairs
- home office running costs
- internet usage (excluding connection fees)
- parking fees (only for work-related claims)
- phone calls
- student union fees
- student services and amenities fees
- trade, professional, or academic journals
- travel to-and-from place of education (only for work-related claims)
Some travel for journeys cannot be claimed, but you may be able to offset the cost of these journeys against the $250 reduction.
Self-education expenses are broken into five categories. If all of your self-education expenses are ‘category A’ items then you have to reduce your deduction by $250. Above are examples of category A items
However ‘category E’ expenses’ can be used to offset the $250. Some category E items are childcare costs, computer purchases and travel from place of study to home.
This can become quite complicated, so if you are unsure whether you need to reduce your claim on this year’s tax return? Contact us on email@example.com and we can provide you with guidance and advice based on your own particular circumstances.