Will you need to buy textbooks for your work-related study, or perhaps invest in a new computer? You can claim deductions for these expenses, and others, if your course of study has the necessary connection to your current employment
. Find out what rules apply when claiming for books, equipment, accommodation and travel, and ensure you’re claiming everything you’re entitled to.
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. In the previous instalment of our series on work-related study expenses, we explained when you can deduct your course fees. In this instalment, we look at other expenses like textbooks, computers and travel.
An important rule to remember is that in order to deduct any of the expenses discussed in this article, there must be a sufficient connection between your course of study and your current income-earning activities. 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.
Books and equipment
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 or tool or furniture (eg a desk or filing cabinet) to help you complete your studies, you may claim the interest expenses on any loan you’ve taken out to fund the purchase, and you may also claim equipment repair costs as they arise. However, you can’t initially deduct the purchase price. Instead, these are depreciating assets for which you can claim a deduction for decline in value. Your tax adviser can help you determine how the depreciation rules apply to your purchases.
If you use equipment such as a computer for both study and private purposes, you can only claim for the study-related proportion of your use. For example, if you use the computer for study purposes 60% of the time, you can deduct 60% of the interest expenses, repair costs and decline in value.
Meals, accommodation and travel
Generally, meals and accommodation are considered private expenses and therefore aren’t deductible. However, you can deduct these expenses if your study requires you to temporarily sleep away from home for at least one night. You can also claim your travel expenses in these circumstances.
What about day-to-day travel? You can usually deduct your costs for travel between home and the place of education (and back again) and between your workplace and the place of education (and back again).
However, if you’re making a double-leg journey, your deductions are restricted. If you’re travelling from home to your place of education and then on to work, the second leg of that journey is not claimable. (Similarly, when travelling from work to your place of education and then home, the second leg is not 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. Your tax adviser can help you determine which method is more appropriate for your situation. If you’re claiming car expenses for both study-related travel and ordinary work-related travel, you’ll need to account for these separately in your tax return.
In many cases, taxpayers are required to reduce their total claim for work-related education expenses by $250. This is a complex calculation that depends on what other education expenses you incur in the financial year. Your tax adviser can assist with performing this calculation.
Maximise your return
Work-related study deductions like depreciating assets and car travel can be tricky. 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.