You may be able to claim a deduction for self-education expenses if your study is work-related. However, certain aspects need to be kept in mind before claiming the same. Your current employment and the course you undertake must have a nexus for your education expense to qualify as a work-related tax deduction. If a course of study is too general in terms of your current income-earning activities, the necessary connection between the self-education expense and your income-earning activity does not exist and hence cannot be claimed as a self-education deduction.
A tax deduction for your self-education expenses related to your work as an employee is available if you work and study at the same time and can satisfy any of these conditions:
- You are improving your qualifications for your current employment – for example, upgrading from a Bachelor qualification to a Masters qualification in the same stream.
- You are improving specific skills or knowledge used in your current employment – for example, a course that will allow you to operate more effectively at work
- You are employed as a trainee and you are undertaking a course that forms part of that traineeship – for example, an overseas trained person employed as an intern while doing a bridging course.
- You can show that at the time you were working and studying, your course led, or was likely to led, to an increase in employment income – for example, a teacher who will automatically get a pay increase as a result of completing the course.
You cannot claim a deduction for self-education expenses for a course that does not have a direct connection to your current employment even though it:
• might be generally related to it, or
• enables you to get new employment.
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
• fares
• home office running costs
• interest
• internet usage (excluding connection fees)
• parking fees (only for work-related claims)
• phone calls
• postage
• stationery
• student union fees
• student services and amenities fees
• textbooks
• trade, professional, or academic journals
• Travel to-and-from place of education (only for work-related claims)
Expenses you can’t claim
You cannot claim the following expenses in relation to your self-education:
- repayments of Higher Education Loan Program (HELP) loans (although the fees paid by some HELP loans are)
- Student Financial Supplement Scheme (SFSS) repayments
- home office occupancy expenses
- Meals (unless sleeping away from home), where not sleeping away from home.
$250 reduction on self-education expenses
One can’t claim the first $250 of self-education expenses for textbooks, stationery, student or tuition fees, travel, car expenses (logbook method) and home office expense. However, one can offset thee with other type of expenses like repair costs and depreciation of items costing over $300
For further assistance, please contact Taxplanners on 1300 000 TAX (1300 000 829), 03 9600 0143 (10 Lines).
You can also visit our office for assistance –
Melbourne CBD – Suite 411-413, Level 4, 343 Little Collins Street, Melbourne
Werribee Office – 88 Watton Street, Werribee, Contact – 03 901 MY TAX (03 9016 9829)