self-education expenses

Claiming tax deductions for self-education expenses

16 Jan, 2017

If you complete a work-related study course at a school, college, university or other recognised place of education, you may be able to claim a tax deduction on self-education expenses related to that course.

 

Determining your eligibility for a self-education expenses deduction

The ATO’s requirements are that you work and study at the same time, the course is clearly connected to your current employment, and it either:

  • maintains or improves the specific skills or knowledge you require in your current employment

or

  • results in, or is likely to result in, an increase in your income from your current employment.

If the area of study is too general and doesn’t have a clear connection to your current income-earning activities, you cannot claim a tax deduction for self-education expenses on that course.

The ATO is pretty strict on this point, so make sure the course is specifically related to your current employment if you want to claim expenses as a tax deduction. It’s not enough to say that the course will offer you better employment opportunities in the future.

 

Which expenses are included?

As long as you satisfy the above requirements, the following self-education expenses may be claimed as tax deductions:

  • accommodation and meals if you have to be away from home for one or more nights for the course
  • computer expenses, including interest to finance a computer purchase
  • depreciation of the cost of your computer, professional libraries, desks, chairs, filing cabinets, bookshelves, calculators, technical instruments, tools and other equipment used for your studies (such as desk lamps)
  • photocopying
  • running expenses for a room you have set aside for your work-related study, including heating, cooling and lighting costs for the time you’re studying in the room
  • self-education expenses paid with your Overseas Study — Higher Education Loan Program (OS-HELP) loan
  • stationery
  • student union fees
  • textbooks, professional and trade journals
  • travel expenses between your home (or work) to your place of education and back
  • tuition fees, including fees payable under FEE-HELP

If you use a particular room for work-related study purposes, you can claim a fixed rate of 45 cents per hour of usage to cover the cost of heating, cooling, lighting, cleaning and decline in value of furniture, instead of having to record and calculate these costs individually.

 

Expenses that are not eligible for a tax deduction include:

  • accommodation and meals associated with day-to-day living expenses
  • repayments you make (whether compulsory or voluntary) on debts you may have under the following loan schemes:
    • HECS-HELP
    • FEE-HELP
    • OS-HELP
    • Student Financial Supplement Scheme (SFSS)
  • self-education expenses such as tuition fees paid under HECS-HELP

In some cases, the amount of your claim may be reduced by $250, but you can find out more about that here.

 

In summary:

  • Expenses related to a study course that you complete for work purposes can be claimed as a tax deduction providing the course meets certain requirements
  • The course must be completed while you’re working, must be clearly connected to your current employment, and must either improve skills needed for your current employment or be likely to result in an increase in income from your current employment
  • If there is no a sufficient link between your course and your current employment, the ATO may reject your claim
  • Various expenses are covered, including accommodation and food for trips away from home, depreciation of items you use to study, and running costs of a room at home you use to study
  • Day-to-day accommodation and food costs and certain tuition fees and debt payments are not covered
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