Removal of Self-education $250 deduction limit
The Government has amended the law to remove the $250 non-deductible threshold for self-education expenses (by repealing S.82A of the ITAA 1936) from 1 July 2022 (i.e., from the 2023 income year). This will make it simpler for individuals to calculate their self-education expense deductions under S.8-1.
Prior to 1 July 2022, the total amount of a taxpayer’s self-education expenses that could be deductible under S.8-1, which related to a ‘prescribed course of education’ (e.g., a course provided by a university), could not be greater than the amount by which those expenses exceeded $250. As a result, only the excess of a taxpayer’s self-education expenses over $250 for an income year could be deductible under S.8-1.
Self-education expenses are the costs you incur when you:
- undertake courses at an educational institution (whether or not the courses lead to a formal qualification)
- attend work-related conferences or seminars
- do self-paced learning and study tours (whether within Australia or overseas).
You can claim a deduction for a self-education expense if, at the time you incur the expense, it has a sufficient connection to earning income from your employment activities.
- maintains or improves the specific skills or knowledge you require in your employment activities
- results in, or is likely to result in, an increase in your income from your employment activities.
|A||Tuition fees, textbooks, stationery, student union fees, student services and amenities fees, public transport fares, car expenses worked out using the ‘logbook’ method (other than the decline in value of a car), running expenses for a room set aside specifically for study.|
|B||Decline in value (depreciation) deductions for items such as a computer, desk, or car for which you are claiming a deduction in Category A under the ‘logbook’ method.|
|C||Repair costs to assets used for self-education purposes. Don’t include car repair expenses here as it is part of car expenses in Category A or D.|
|D||Car expenses using the ‘cents per kilometre’ method – you can’t use this method if you have used the ‘logbook’ method in category A.|
If you have questions in relation to the above, or any other matters, please do not hesitate to contact our office on 1300 620 345.