Self-education expenses

Self-education is one way of ensuring you keep up to date with developments relating to your field of employment, with the added bonus of making yourself attractive to any future employers.

There are a number of self-education expenses which are tax deductible, to help encourage employers and employees to undertake educational programs. Self-education expenses include courses undertaken at educational institutions, work-related seminars or conferences, self-paced learning and study tours (overseas or within Australia).

A tax deduction for self-education expenses will be allowed on the condition that there is a direct link between the course undertaken, and how you derive your income.

To be entitled for a deduction, you will need to satisfy any of the following tests:

• the expense has a relevant connection to your current income earning activities
• the self-education program enables you to maintain or improve the skills or knowledge necessary to carry out your current income earning activities
• the self-education leads to, or is likely to lead to, an increase in your income from your current income earning activities.

Deductions will not be allowed if the course of study is designed to get employment in a different field (a teacher studying to become an accountant), or to open up new income earning opportunities in the future. Self-education expenses to open up new opportunities in future are incurred “at a point too soon” to be regarded as being incurred in producing your assessable income.

Examples of expenses that may be tax-deductible are:

• accommodation and meals
• course fees
• decline in value for depreciating assets (cost exceeds $300)
• purchase of equipment/computer consumables costing less than $300
• internet usage
• postage & stationery
• student union fees
• textbooks

The repayment of Higher Education Loan Program (HELP) Loans cannot be claimed as self-education expenses.

If you are unsure about the treatment of self-education expenses, contact an accountant at Optima Partners today.

Petro Groenewald

SNR ACCOUNTANT – OPTIMA PARTNERS