Claiming Self-Education Expenses

Claiming a Deduction for Self-Education Expenses

In order to claim a deduction for any form of work-related self-education expense, there must be a connection between the self-education activity and your income earning activities at the time you incur the expense. You can claim a deduction for self-education when the expense has the essential character of an income-producing expense. To be eligible for a deduction for expenses you incur for a self-improvement or personal development course, the course must have a sufficient connection to your current employment.

According to the Australian Tax Office (ATO), ‘Self-education’ is defined as courses undertaken at an educational institution, attendance at work-related seminars or conferences, or self-paced learning and study tours (overseas or within Australia).

This means that the expenses you incur as a result of undertaking such study can be claimed as a tax deduction, potentially saving you thousands of dollars! First of all you have to determine the eligibility of the expenses.

To be able to claim for the expenses, the self-education must relate directly to your current field of work, for example completing an MBA programme that you know will lead, or be likely to lead, to an increase in your employment income.

However, if you’re completing an MBA and the programme does not relate to your current employment, or you’re using it to start your own business, the self-education expense will not be tax-deductible.

The ATO is targeting large self-education expenses. It’s important to ensure that there is a clear connection between your current employment or business activity and the expenses you are claiming before you claim them.