Tax Return:: Claiming Self-Education Expenses

Hello, this is your tax and super specialist, P&C Tax Professionals.

Did you know that you can claim your self-education expenses as tax deductions once certain conditions are met?

Simply attending a language school or enrolling in a course that is broadly related to your employment activities does not make you eligible to claim for the self-education tax deduction. Instead, your studies would have to be closely related to the work you have undertaken during the financial year.

<Eligibility Criteria>

The course you are studying must have a sufficient connection to the current job you are undertaking and which either:

> maintains or improves the particular skills and/or knowledge that is demanded by your current employment or;

> results in (or is likely to result in) an increase in your annual income from your current employment.

For example, people who work as a chef and study a cookery course can develop their cooking skills and knowledge through their studies which can in turn lead to an increase in their salary. In this case, they would be able to claim their self-education expenses. However, if you are a cashier or a waiter/waitress who is primarily in charge of serving food to the customers, you would not be able to claim your education expenses as deductions since your main task is not closely related to cooking.

Furthermore, if you are working as a nurse in a hospital and studying a nursing course, you can claim your tuition fees as a tax deduction for your self-education expenses. On the other hand, an aged-care worker would not be able to claim a tax deduction for the tuition fees they incur as it lacks connection with the course they have enrolled into.

Those who work in accounting can also claim for their self-education tax deduction if they enroll into an accounting course as this can help improve their skills and knowledge while also leading to a rise in their salary. However, if an individual who is working as an accountant does not study accounting but instead studies a business course, this will make them illegible to claim for this particular deduction.

There are a wide range of expenses that can be claimed as part of the self-education expenses apart from the tuition fees such as textbooks, stationery, student union fees, etc. Please refer to the link below to check out the full list of "expenses you can claim".

Link to ATO's self-education expenses:

https://www.ato.gov.au/Individuals/Income-and-deductions/Deductions-you-can-claim/Self-education-expenses/

Generally speaking, the majority of the people who claim for the self-education expenses are those individuals with an income above $22,000 so that they could reduce their tax payable on their taxable income. People with an income below $22,000 are subject to receive a full tax refund, hence, including the self-education expense as a tax deduction will make no difference to their tax refund amount.

It is important to note that in order to apply for the self-education expense tax deduction, you must keep supporting documentations such as your tuition receipt which shows the fees you have paid for during the financial year.

Since there are a lot of documents to prepare for the self-education tax deduction and because the claim amount is usually quite substantial, there is a higher possibility that a tax audit will be conducted by the ATO. As a result, it is best to consult with a professional accountant before proceeding with the lodgment of your tax return.