Self-Education Expenses – Tax Deductible or Not?

Like many tax related questions, this one is more complex than it seems!  But given that studying to advance your career can involve significant costs, it’s definitely a question worth asking.

If you incur costs due to work-related study, the ATO refer to these as “self-education expenses.”

Eligible courses

Your course of study must lead to a formal qualification and needs to have a sufficient connection to your current employment.

To have this connection, it needs to:

  1. Maintain or improve the specific skills or knowledge you require in your current employment; for example: Jeff is a warehouse manager.  He completes a training course which licences him to operate additional machinery types at work.
  2. Upgrade your qualifications for your current employment; for example: Rebecca is employed as an accountant and currently holds a Bachelor degree.  She completes the Graduate Diploma of Chartered Accounting.
  3. Form part of a traineeship that you are employed in; for example: Mark needs to complete a variety of courses through TAFE as part of his traineeship,
  4. Result in, or be likely to result in, an increase in your income from your current employment; for example: Sally, a secondary school teacher, will receive an automatic pay increase upon completing a university course in behaviour management.

You cannot claim expenses for study that only generally relates to your work, is merely in the same field or industry, or enables you to get new employment (or a new job with your current employer).

You can claim more than the course fees!

The types of expenses you can claim include:

  • Course or tuition fees (Note, this includes fees payable under FEE-HELP, VET-HELP and OC-HELP but not under HECS-HELP.  HECS-HELP covers tuition fees for most undergraduate courses.)
  • Textbooks, professional and trade journals
  • Stationery
  • Photocopying
  • Computer expenses
  • Student union fees
  • Student services and amenities fees (SSAF)
  • Accommodation and meals (where the course requires you to be away from home for one or more nights)
  • Certain home office expenses, if you have a room set aside for self-education purposes (including heating costs, cooling and lighting that room while you study)
  • Allowable travel expenses (this generally does not include travel from home to your study location)
  • Depreciation on equipment used to study

First $250 claim

Importantly, the first $250 of self-education expenses each year are non-deductible, although this amount can be reduced in some circumstances depending on the type of expenses you have incurred.

 

Record keeping

Remember, if your total deductions (including self-education expenses, travel costs, car expenses, work-related expenses etc.) in a year total $300 or more, you must keep receipts for all your deductions!

 

Need help?

Contact your Stewarts advisor if you have questions regarding your particular situation.

 

General advice disclaimer: The information provided is general in nature and does not take into account your personal situation and is not to be construed as advice. We specifically disclaim any losses or damages suffered by any party who may rely on this information in relation to their personal taxation or financial affairs.

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