Claiming Self-Education Expenses as Tax Deductions

Self-education is essential for our minds, our general sense of wellbeing and our future employment prospects

After all, if we stop learning, we stagnate. Our minds become dull, for us and everyone around us.

Another worrying fact is that these days technology, software and workplace processes change so fast that if you don’t keep up you’ll quickly find yourself left behind in your career as a consequence. Needless to say, none of us want to watch our colleagues forge ahead as we languish in the same position for years on end.  Worse still, find yourself replaced by a more efficient, clued up, better educated version of you!

But that’s not all. The other BIG bonus about continuing to educate yourself is that many self-education expenses are tax deductible. Seriously, how much more encouragement do you need to make a better you?

Of course, when it comes the expenses part of all that, we are talking about the ATO and tax here so unfortunately you can’t just claim whatever you want.

So, let’s start with the what, how and when you can claim self-education expenses.

What are Self-Education Expenses?

Self-Education expenses are expenses related to courses provided by a school, college, university or other training provider that you personally undertake. To be eligible for a tax deduction, you must take this course to gain a formal qualification in your current profession, business or trade.

The finer details…

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:

1. Upgrading your qualifications for your current role.
2. Improving your skills or knowledge used in your current role.
3. A trainee and the course you take forms part of the traineeship.
4. 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 self-education expenses if your intention is to get:

• a different job, or
• money from a new income-earning activity (such as starting a new business).

Self-education tax deductions can include:

• course/tuition fees
• accommodation and meals (if away from home overnight)
• travel expenses and parking fees
• costs of computer consumables (printer ink, software, USBs etc.)
• decline in value for depreciating assets (for items costing in excess of $300)
• purchase of equipment or technical instruments (costing $300 or less)
• equipment repairs
• home office running costs
• internet usage (excluding connection fees)
• phone calls
• postage
• stationery and textbooks
• purchase of trade, professional, or academic journals
• student union fees
• student services and amenities fees

The $250 reduction on self-education expenses

Now, the $250 reduction is where these expenses get complicated. Basically, you can’t claim the first $250 of self-education expenses for textbooks, stationary, tuition and student fees, travel, car expenses (logbook method) and home office running costs. However, you CAN offset other types of expenses against these such as; depreciation on items costing over $300 and repair costs. These can reduce or cancel out that $250 deduction. Luckily, the Etax online tax return, along with our reviewers, make sure Etax clients claim ALL the education expenses they are entitled to.

Unsure whether you need to reduce your claim on this year’s tax return? Contact us on [email protected] and one of our accountants can provide you with tailored advice based on your personal circumstances.

Remember, if your total claim for all expenses/deductions totals more than $300, you must keep written evidence. This is because you may need to prove that the expenses were actually paid by you. So, keep all those receipts, diaries and logbooks safe and up to date so tax time doesn’t mean searching through thousands of emails, the glove box or piles of paper in your office.