Can You Claim Self-Education Expenses as Tax Deductions?

Can You Claim Self-Education Expenses as Tax Deductions?
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If you’re like many Australians and spent lockdown teaching yourself something work-related, you might be able to claim self-education expenses on your tax return this tax time.

Tax time is just around the corner (yep, this year has gone by super quickly), so now it’s time to determine if those Python tutorials or Excel courses will add to your tax deduction, that is: can you claim self-education expenses?

The answer is, of course, yes and no. The following has been summarised from documentation available from the Australian Taxation Office (ATO), links for further explanation can be found throughout.

How to claim self-education expenses on your tax return

You can claim a deduction for self-education and study expenses if the education relates to your current employment activities or if you receive a taxable bonded scholarship.

You generally can’t claim the first $250 of expenses for your self-education. This is a little bit confusing, and although you can’t claim the first $250, you need to document the expenses.

What you can and can’t claim on tax

You can claim self-education and study expenses you incur when the course you take leads to a formal qualification. The course must have a sufficient connection to your current employment activities as an employee and either: maintains or improves the specific skills or knowledge you require in your current employment activities or results in (or is likely to result in), an increase in your income from your current employment activities.

You can’t claim a deduction for self-education and study expenses for a course that: doesn’t have a sufficient connection to your current work activities; only relates in a general way to your current employment – such as undertaking a full-time fashion photography course and working as a casual sales assistant on the weekends or enables you to get new employment or change employment – such as moving from employment as a nurse to employment as a doctor.

If the self-education expenses do relate to your employment, you can claim a deduction for accommodation and meals (if away from home overnight), car expenses, computer-adjacent items (such as printer cartridges), course and tuition fees (only if you pay these), decline in value for depreciating assets (cost exceeds $300), equipment or technical instruments (costing $300 or less), equipment repairs, fares, fees payable on some study and training support loans (not repayments on the loan itself), home office running costs, any interest, internet and data usage (excluding connection fees), parking fees (only for work-related claims), your phone (if used), postage, stationery, student union fees, student services and amenities fees, textbooks, any documentation (such as trade, professional or academic journals purchased) and travel costs, including car expenses between home and your place of education or between your workplace and the place of education.

Again, you can only claim a deduction for the self-education expenses that relate to your current employment.

You can’t claim tuition fees paid by someone else or that your employer or a third-party reimburses you for, student contribution amounts, home office occupancy expenses (such as rent, mortgage interest or rates), accommodation and meals or repayments of study and training support loans such as Higher Education Loan Program (HELP), Student Financial Supplement Scheme (SFSS), VET Student Loans (VSL) or the Student Start-up Loans (SSL) Trade Support Loan Program (TSL).

The ATO has a very handy self-education expenses calculator to help you determine your eligibility for work-related self-education expenses and it also helps you estimate how much you can claim at tax time.

What home office expenses you can claim on tax?

An employee who is working from home (ie, you) may be able to claim deductions for expenses you incur that relate to your work. But this doesn’t mean a daily coffee delivered by Uber Eats or an oodie (despite it being your ‘work’ attire) can be claimed.

The ATO has a guide on this for those of you who wfh, but in summary, you must meet the three golden rules:

  • You must have spent the money yourself and weren’t reimbursed.
  • The expenses must directly relate to earning your income and not be private in nature.
  • You must have a record to prove it (a receipt is best).

Included in the list of items you can claim as a deduction at tax time is home office equipment, including computers, printers, phones, furniture and furnishings – you can claim either the full cost of items up to $300 or the decline in value (depreciation) for items over $300.

Can you claim a laptop for study on tax?

If you’re employed and required to work from home and have recently bought a laptop, you may be able to claim the value of your computer as a year-by-year depreciation deduction. In saying that, you must genuinely use the laptop for work. If you use the laptop for both work and private purposes, you can only claim a percentage based on the work-related portion of usage. If you paid for your computer, but your employer reimbursed you, you are not eligible to claim a deduction for it.

If you use the laptop you purchased for work for study too, just remember you can’t claim the same thing twice.

If your laptop was under $300, you can claim an immediate deduction for the full cost of the item. If the laptop you used for study was over $300, at tax time you can claim the depreciation over the life of the equipment as a deduction on your return. For laptops, this is typically two years and for desktops, typically four years.

You can’t claim a deduction for the cost of pay television or streaming services such as Foxtel or Netflix. This is a private expense.

How to lodge your tax return

You can lodge online using myTax, through a registered tax agent or complete a paper tax return. Your tax return covers the income year from 1 July to 30 June. Tax time is July 1, 2022. If you need to complete a tax return you must lodge it or engage with a tax agent, by 31 October, 2022.

It’s best to discuss your tax options with an agent, this is intended to just be general advice, with links to official ATO documentation to guide you as we approach tax time.

This article has been updated since it was first published.