WARNING: Not all courses are eligible for "Self-Education Tax Deduction"
With End of Financial Year fast approaching, I am sure you are inundated with marketing ads urging you to "Enrol Now!" and "Claim your Self-Education Tax Deduction before 1 July", all in red, bold and all caps letters so you don't miss out.
But before anything else, let me tell you this: NOT ALL COURSES ARE ELIGIBLE FOR SELF-EDUCATION TAX DEDUCTION.
Yes, that is right. Not all courses are eligible for self-education tax deduction, but some are. Now that I've got your attention, let me tell you which are indeed eligible for self-education tax deduction.
Self-education expenses are deductible when the course you undertake leads to a formal qualification and meets the following conditions.
The course must have a sufficient connection to your current work activities as an employee and:
maintain or improve the specific skills or knowledge you require in your current work activities
result in, or is likely to result in, an increase in your income from your current work activities.
You can't claim a deduction for self-education expenses for a course that doesn't have a sufficient connection to your current work activities even though it:
might be generally related to it – such as undertaking a full-time fashion photography course and working as a casual sales assistant on the weekends
enables you to get new employment – such as moving employment as a nurse to employment as a doctor.
Expenses you can claim
You can claim a deduction for following expenses related to your eligible self-education:
General course expenses
Expenses you can't claim
You can't claim the following expenses in relation to your self-education:
tuition fees paid by someone else or that you have been reimbursed for
student contribution amounts
repayments of Higher Education Loan Program (HELP) loans (although the fees paid by some HELP loans are)
Student Financial Supplement Scheme (SFSS) repayments
Student Start-up Loan (SSL) repayments
Trade Support Loan Program (TSL) repayments
home office occupancy expenses – for example, rent, mortgage interest or rates
accommodation and meals (unless sleeping away from home for study, such as to attend a residential school).
$250 reduction in expenses
Self-education expenses are broken into five categories (see below). If all of your self-education expenses are 'category A' items then you have to reduce your deduction by $250.
However 'category E' expenses' can be used to offset the $250.
Expenses offset against the $250 reduction
While you can't claim a deduction for the following expenses, you can however, offset the $250 reduction through these expenses. These expenses include:
childcare while attending self-education activities
capital expenses related to your self-education such as, the purchase of a desk
fares, travel or car expenses for these journeys
for work-related self-education, the second leg of a trip if you went from home to your place of education and then to work, or the other way around
if you receive a taxable bonded scholarship and are not employed by the scholarship provider, travel from home to your normal place of education and back.
The Australian Taxation Office (ATO) also provides a free Self-Education Expenses Calculator that you can access here.
IMPORTANT PUBLIC SERVICE ADVISORY
If you are enroling with South Sydney College to take advantage of the Self-Education Tax Deduction, give us a call (0438 983 390) or send us an email (email@example.com) and we we will let you know if the deduction may apply to you.
*Information provided in this blog is accurate as of writing, based on the information provided on ATO's website. Please visit ATO's website for complete and most up-to-date information on any tax-related matters.