Self-education expenses are expenses you incur studying an eligible course to obtain a formal qualification from a school, university, college or other place of education (such as TAFE or private registered training organisation). The course(s) you study need to bedirectly connected to your current work or employment.
To Claim A Deduction:
• Maintain or improve the specific skills or knowledge you require for your work.
• Result in (or likely result in) an increase in your income in your current employment.
For example, if you’re working as a project manager without qualifications and have decided it’s time to formalise your skills with a Certificate IV in Project Management, then you should be eligible to claim self-education tax deductions.
When Can’t You Claim A Deduction?
You cannot claim a deduction for self-education if your course is not closely related to your current employment, even if:
• The course is generally related to your employment.
• The course enables you to find new employment.
Unfortunately, that means you can’t claim deductions if you’re unemployed and your study will likely lead to you getting a job (there may be other assistance available through Centrelink).
What Self-Education Expenses Can You Claim?
You can potentially claim:
• course fees
• accommodation and meals (if you need to travel away from home overnight)
• computer consumables
• decline in value of depreciating assets
• stationery
• postage
• home office running costs
• travel to-and-from place of education
• trade, professional, or academic journals
• textbooks
• interest
• internet usage (excluding connection fees)
• parking fees (only for work-related claims)
• fares
• phone calls
• equipment repairs
• purchase of equipment or technical instruments costing less than $300
• student union fees
• student services and amenities fees
If an item or service is used for multiple purposes, then you need to divide up each expense based on how much you used it for self-education.
For example, if you use your computer and internet connection for study, but ALSO use it for streaming movies, checking personal emails and surfing the web, you need to work out how much use is personal and how much is self-education.
You might study online for 16 hours a week, and spend 4 hours chatting to friends on social media and skype, for a total of 20 hours use.
Of your 20 hours use:
• 80% (16 hours) is for self-education
• 20% (4 hours) is personal
Therefore you’ll be able to claim 80% of your computer-related and internet expenses as tax deductions. It’s a good idea to keep a log of your usage so that you can justify your proportioning of expenses if the tax office asks.
How Much Can You Claim?
How much will you be able to claim all up? Try the Australian Tax Office’s Self-Education Expenses Calculator
From 1 July 2014, work related self-education expenses will have an annual cap of $2,000 per person. That might sound low, but according to recent ATO data, the typical claim for formal qualifications is $905, less than half the proposed cap. Other expenses, such as conferences, seminars and workshops, are typically only worth a few hundred dollars on a claim.
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