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When you lodge your income tax return with the Australian Taxation Office (ATO), you may be entitled to claim a tax deduction for your self-education expenses. However, it is important that you meet the relevant criteria and claim the correct deduction. You also need to keep written records for a minimum period of 5 years to be able to prove your entitlement to the amount claimed.

If you claim the wrong tax deduction form the ATO, it is likely that the ATO will disallow your claim and heavily penalise you for it. In some cases, the penalty can be as high as 75% of the tax shortfall. Therefore, it is important to get this right and claim the right amount.

When can you claim a tax deduction for your self-education expenses?

You can claim a tax deduction for your self-education expenses when:

• The course you undertake leads to a formal qualification;
• The course has a sufficient connection to your current work activities as an employee; and
• The course maintains or improves the specific skills or knowledge you require in your current work activities or result in, or is likely to result in, an increase in your income from your current work activities.

You cannot claim a deduction for self-education expenses for a course that does not have a sufficient connection to your current work activities even if it is generally related to you work. You also cannot claim a deduction for a course that enables you to get new employment.

What expenses can you claim for your self-education expenses?

Generally, you can claim a deduction for the following expenses related to your eligible self-education:

• Accommodation and meals (if away from home overnight)
• Car expenses
• Computer consumables
• Course fees
• Decline in value for depreciating assets (cost exceeds $300)
• Purchase of equipment or technical instruments (costing $300 or less)
• Equipment repairs
• Fares
• Home office running costs
• Interest
• Internet usage (excluding connection fees)
• Parking fees (only for work-related claims)
• Phone calls
• Postage
• Stationery
• Student union fees
• Student services and amenities fees
• Textbooks
• Trade, professional, or academic journals
• Travel to-and-from place of education (only for work-related claims)

What expenses cannot be claimed for your self-education expenses?

You cannot claim a deduction for the following expenses:

• Tuition fees paid by someone else
• Repayments of Higher Education Loan Program (HELP) loans (although the fees paid by some HELP loans are)
• Student Financial Supplement Scheme (SFSS) repayments
• Student Start-up Loan (SSL) repayments
• Trade Support Loan Program (TSL) repayments
• Home office occupancy expenses
• Accommodations and meals (unless sleeping away from home)

Are you under a tax audit by the ATO for your self-education expenses?

If you are audited by the ATO, you should contact an experienced tax lawyer immediately to get legal advice and representation. This will ensure that you get the possible outcome for the audit and minimise the ATO’s penalties.

Do you need legal advice from an experienced tax lawyer on your self-education expenses?

This content of this article is offered as general information only and should not be relied on as specific legal advice on whether you are entitled to claim a tax deduction for your self-education expenses under the Australian tax laws.

To get legal advice from King Lawyers on your specific circumstances, please contact us to arrange an initial consultation with our expert tax lawyers.