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Get schooled on self-education deductions


Is it finally time to buckle down and take on that diploma, master’s degree or other qualification that will take your career to the next level? Planning to up your professional development this year? Or just nostalgic for those good old uni days? Well, what’re you waiting for? Education may provide new knowledge, skills, opportunities, and maybe a step closer to world domination…but most excitingly, the cost of your education expenses may also reduce your tax bill.

Self-education expenses

If you have incurred education expenses and they have a relevant connection to your current employment or income producing activities, the expense may be deductible in your tax return. Short courses, seminars and training undertaken for work may be included as an ordinary work related deduction. Costs you incur to undertake a course of study at a school, college, university or other recognised place of education may also be deductible as ‘expenses of self-education’.

When are self-education expenses deductible?

Self-education expenses are deductible when the study you undertake has a sufficient connection to your current employment and maintains or improves the specific skills or knowledge you require in your current employment, or is likely to result in an increase in your income from your current employment.

You cannot claim a deduction for self-education expenses for a course that is too general or doesn’t have sufficient connection to your current employment such as general self-improvement. Also, the cost of study that will lead to future employment or allow you to start a new income producing activity via new employment or business is not deductible.

For example, Richie is a solicitor undertaking a Master of Law degree part-time. As the degree will improve the knowledge required for his current employment, Richie is entitled to claim a deduction for relevant expenses relating to the degree.

Richie’s mate Bruce is also a solicitor and is undertaking a Master of Journalism part time. Bruce is not entitled to a deduction for the related expenses as the degree does not maintain or improve specific skills or knowledge he requires in his current employment.

What expenses can you claim?

The types of deductible expenses which relate to self-education may include the following:

  • Course or tuition fees incurred, including fees payable under FEE HELP
  • Textbooks, stationary, and professional or trade journals
  • Airfares for study tours, sabbaticals, work conferences, seminars, or attending an educational institution
  • Meals and accommodation for study tours, sabbaticals, work conferences, seminars, or attending an educational institution where you are required to be away from home overnight
  • Interest paid on loans setup to fund relevant self-education costs

If an expense is partly for your self-education and partly for private purposes only the amount that relates to your self-education can be claimed as deduction unless the private portion is merely incidental.

What’s next?

Get out there and expand your minds, people! The world is your oyster; go and learn everything you can (well, at least everything that relates to your work) and keep a record of your expenses! If you are using Xero Cashbook to track your expenses, try attaching your invoices to the relevant transactions as you go so they don’t go missing! Your accountant will be thrilled to help add in the extra deductions when it is tax return time.

We are here for you.

Please do not hesitate to contact one of our friendly team members at The Hopkins Group here to discuss what you can be included in your tax return this year, what your tax obligations are and how you can best keep track of your expenses.

General advice warning: The information contained herein is of a general nature only and does not constitute personal advice. You should not act on any recommendation without considering your personal needs, circumstances and objectives. We recommend you obtain professional financial advice specific to your circumstances.

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