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Undertaking further study is a great way to enhance your skills on the job, but on top of tuition fees you may be facing a range of additional costs. After discussing when you can deduct your course fees in our last article, we’re now considering how you can claim deductions for expenses such as textbooks, equipment and travel, if your course of study has the necessary connection to your current employment.
This generally means the course must either maintain or improve the skills or knowledge you need for your current employment or result in (or be likely to result in) an increase in your income from your current employment.
Textbooks are notoriously expensive! The good news is that you can generally deduct the cost of textbooks, as well as stationery and photocopying expenses, in the year of purchase.
Computers and other equipment are a little more complicated. If you buy a computer, calculator, technical instrument, tool or furniture (eg a desk) to help with your studies, you may claim the interest expenses on any loan you’ve taken out to fund the purchase, and claim any repair costs. Although you can’t initially deduct the equipment’s purchase price, you can claim a deduction for the decline in value of these depreciating assets. Also, if you use equipment such as a computer for both study and private purposes, you can only claim for the study-related proportion, calculated as a percentage of your use.
Generally, meals and accommodation are considered private expenses and therefore aren’t deductible. However, you can deduct these expenses as well as travel expenses if your study requires you to temporarily sleep away from home for at least one night.
What about day-to-day travel? You can usually deduct your costs for travel directly between home and the place of education (and back again) and between your workplace and the place of education (and back again). However, double-leg journeys (eg home to work and then to study) are only partly claimable.
For public transport travel, you can claim the relevant fares you paid. For car travel, you can choose between the “cents per kilometre” method and the “logbook” method.
In many cases, taxpayers are required to reduce their total claim for work-related education expenses by $250. This is a complex calculation that your tax adviser can help you assess.
Take the stress out of your claim and talk to us for expert assistance. We’ll help you substantiate your deductions and make sure you’re claiming everything you’re entitled to.