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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.


Course eligibility

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

  • Depreciating assets

  • Car 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.


For more information, you may download the PDF summary from ATO's website here or visit https://www.ato.gov.au/ for complete details.

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 (info@ssc.edu.au) 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.


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