For those of you out there who are undertaking additional studies while working, this article is a must read. You may be entitled to claim a deduction for self-education expenses if you are engaged in studies while working. The study must be appropriately related to your current work and be deemed as an ‘eligible course’ by the ATO.
Eligible courses are those undertaken to obtain a formal qualification from a school, college, university or other place of education. The course must have a sufficient connection to your current employment (general relation is not enough) either by maintaining or improving the specific skills or knowledge you require in your current employment or will result in, or likely to result in, an increase in your income from your current employer. You cannot claim a deduction for self-education expenses for a course that relates only in a general way to your current employment/profession or will enable you to get new employment.
The range of self-education expenses you can claim is quite expansive and includes accommodation and meals while away from home overnight, computer consumables, course fees, decline in value for depreciating assets costing more than $300, equipment purchases of less than $300, repairs, parking, student union fees and textbooks.
While most of your study is done at home, further deductions are able to be claimed in relation to home office running costs, internet usage, phone calls, postage, stationery and travel. Where an item or service is used partly for your self-education and partly for other purposes, the expense is apportioned between the uses on a reasonable basis and only the proportion that equates to the self-education use is claimed as a deduction.
As you know, studying can be expensive, so anyone who accumulates their education debt via a Higher Education Loan Program (HELP), HECS or similar, cannot claim a deduction for any payments made to reduce the debt. Only course fees paid upfront are deductible.
Certain eligible expenditure incurred from self-education is reduced by $250 as required by the ATO. Private costs including non-deductible travel, childcare costs and capital purchase costs are not available to deduct but are used for the purposes of the $250 reduction.
To seek any further clarifications, please contact us any time here at CNS Partners.