If you're wondering how much, if anything, you can claim for your uni, TAFE or other course, then take a seat: class is in session!
Good news for students working in their field of study this year ending June 2023 - no more $250 reduction of your claims!
Until June 2022 the first $250 you spent towards self-education expenses was not counted as a tax deduction, unless you could show certain exempting factors. For this year onwards, calculating your study expenses is more transparent and you may find your deductions are more and your refund a little larger - who doesn't love that?
Let's start with the basics...
A is for - Applies to your current work
The first thing to bear in mind if you are studying and working, is there needs to be a clear connection between your current work and the course/s you're studying. Studying for a future career can't be claimed in your tax return, but courses and seminars that will improve your skills or allow you to earn more income in your current employment, can. Sometimes, your loosely related job and the job your course will prepare you for are not close enough in required skills and knowledge to satisfy the ATO of this connection. For longer courses we may be able to assess the link on a unit-by-unit (subject-by-subject) basis.
B is for - Borrowed for your fees?
If you borrowed from a bank or other lender to pay for your course, the interest on the loan may be deductible (but only the course-related amount if the loan is used for other purposes as well).
Full-fee tuition costs can be deductible, but subsidised or Commonwealth-supported places are not. This distinction may be in the fine print of your enrolment documents
Also, there's no tax deduction for repaying part or all of your HECS/FEE-HELP, VET or Financial Supplement Scheme and similar debts, even voluntarily.
There may be a benefit to making voluntary repayments before 1 June, when indexation is applied and increases your balance by a cost-of-living factor, especially when the indexation is increasing.
Unless you clear the debt entirely, voluntary repayment will not reduce any amount taken through your tax, but it should shorten the time it takes to clear your HECS/HELP.
C is for - Costs paid by you (not your employer)
If work is paying for your course, or part of it, including if they reimburse you, then the employer is the one entitled to the deduction. Similarly, fees subsidised by the government won't be deductible, as you aren't bearing the cost. Full fee course fees, (and any interest on bank loans used to pay upfront), textbooks, research journals, resources, printing and stationery, internet access expenses, depreciation* on computers and equipment, travel costs between home and in-person classes/trainings as well as accommodation and meals for courses requiring temporary** stays away from home may all be considered as tax deductions if the conditions are right.
Your Assignment:
To prepare for tax time, ensure you have records and receipts for:
the date/s and subjects you studied and what you were doing for work at those times
the various costs you incurred, such as:
course fees (and any interest on bank loans used to pay upfront)
textbooks, journals, resources
printing and stationery expenses
internet access expenses
purchases of computers or equipment
travel costs to & from in-person classes/trainings
accommodation & meals for courses requiring temporary stays away from home
any personal component or use of those costs, especially computer, internet and travel costs, as they will need to be excluded.
If you need a good teacher to help put this theory into practice, or double-check your working, just raise your hand!
*depreciation refers to claiming the cost of a long-lasting item over a period of time rather than all at once. For example, if a laptop is expected to last 3 years, its cost is divided up over that time and claimed in multiple tax returns.
**temporary stays away from home are deductible where there is a clear work-and-education purpose to the trip, such as hotel bill and dinner for a seminar interstate. However semi-permanent relocations such as moving on or near university campus for the semester will be classed by the ATO as personal and private and therefore not deductible.
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