How to claim self-education expenses at tax time

Undertaking study comes at an expense, so it’s imperative to know that in some cases you can reduce your tax for the financial year by claiming for some of your self-education expenses.

According to the Australian Tax Office (ATO), ‘Self-education’ is defined as courses undertaken at an educational institution, attendance at work-related seminars or conferences, or self-paced learning and study tours (overseas or within Australia).

This means that the expenses you incur as a result of undertaking such study can be claimed as a tax deduction, potentially saving you thousands of dollars!

Want to know how? Simply follow these 3 easy steps to find out how to reduce your tax while embarking on your study journey this financial year.

Step 1: Determine your eligibility

To be able to claim for the expenses, the self-education must relate directly to your current field of work, for example completing an MBA programme that you know will lead, or be likely to lead, to an increase in your employment income.

However, if you’re completing an MBA and the programme does not relate to your current employment, or you’re using it to start your own business, the self-education expense will not be tax-deductible.

Step 2: Calculate your allowable expenses

If you are eligible to claim, there are many self-education expenses which are considered allowable deductions, some of which you may not be aware of. So what can you claim for?

Self-education expenses you can claim for may include:

• Tuition fees, including fees payable under FEE-HELP
• Textbooks and stationary
• Clerical expenses such as printing and photocopying
• Running expenses of your study room such as internet bills, new technology for study and furniture purchases
• Interest on money borrowed for study expenses
• And many more!

Self-education expenses that you cannot claim for include:

• Travel expenses between an educational institution and home or work
• Meals purchased while on normal travel between home and an educational institution

To help you confirm your eligibility and calculate an estimate of the deduction you can claim, complete the ATO self-education expenses calculator.

Step 3: Lodge your tax return

To lodge your tax return, speak to your tax professional for advice or consult the ATO website.
When lodging your tax return, it’s important to note that:

• You can only claim self-education work-related deductions for amounts greater than $250 (the first $250 is not tax deductible)
• Written evidence such as tax invoices are required to be kept to substantiate your deductions.

For a detailed description of how to lodge your work-related self-education expenses on your tax forms, see the advice given on the ATO website.

This guide does not take into account your personal circumstances and does not constitute tax advice and should not be relied upon as a substitute for tax advice. AIB recommends that you seek your own independent tax advice to address your personal circumstances.

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