Self-education is an excellent method of making sure you keep up to date with advancements and techniques about your industry along with the added benefit of making you appear amazing to the potential employers.
To inspire employers and employees equally to embark on educational courses, there are a variety of self-education income tax deductions available, including programs undertaken at colleges and universities (regardless of whether resulting in a formal qualification or not), participation at work-related training seminars or conferences, self-paced studying and study trips (abroad or within Australia).
The costs for self-education may be tax deductible provided there exists a direct and provable connection between education and your income earning activity.
Usually you will have to fulfil any of the subsequent tests to be eligible for an income tax deduction:
Tax deductions for self-education expenditures are usually not permitted if the course of study is intended to:
Non Tax-Deductible expenses:
In some instances, courses may have both tax deductible and non-deductible components (such as. a plumber who operates their own business who undertakes a business administration program where by completing the program will allow the plumber also to operate as a qualified business administrator).
In this scenario, the deductibility of your costs is determined by the intent when the course was undertaken. If you’re able to demonstrate that the course is incidental and related to your current income earning activities, the expense is tax deductible. Development of other opportunities does not matter, provided that it was not the reason that you undertook the course. Conversely, if the course was undertaken with the particular objective of changing the taxpayer’s income generating activity, the tax deduction will not be permitted.
When the expenditures would otherwise be tax deductible in the legislation, a deductibility limit is applicable (section 82A ITAA36, if you want to look it up). Only expenses in excess of $250 could be claimed.
Below are some tools from the ATO to assist you to determine your self-education expense claims: