Question D4 - Work-related self - education expenses

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COMPLETE THIS ITEM IF YOU HAVE ANY SELF-EDUCATION EXPENSES RELATING TO YOUR WORK AS AN EMPLOYEE

Self-education expenses that you show at this item are expenses that you incur when you undertake a work-related course to obtain a formal qualification from a school, college, university or other place of education.

The course must have a sufficient connection to your current employment, that is, the course:

·maintains or improves the specific skills or knowledge you require in your current employment, or
·results in, or is likely to result in, an increase in your income from your current employment.

 

You cannot claim a deduction for self-education expenses for a course that does not have a sufficient connection to your current  employment even though:

·it might be generally related to it or
·it enables you to get new employment.

 

STOP STOP

Do not show at this question:

·the cost of formal education courses provided by professional associations. Show these at D5 Other work related expenses.
·the cost of attending seminars, education workshops or conferences that are connected to taxpayer's work activities but do not relate to taxpayer's course of education. Show these at D5 Other work related expenses
·amounts for decline in value of items included in a low- value pool. Show these at D6 Low value pool deduction
·deductions for depreciating assets if you were in business and are using the streamlined provisions for small business entities, which have replaced the simplified tax system (STS). Show these at item P8 in the Business and professional items schedule for individuals 2009
·small business pool deductions for depreciating assets if you were not carrying on any business during 2008-09 but have small business pool deductions because you have previously allocated depreciating assets (such as a car) to an STS pool (now a small business pool) in a prior year. Show these at item D15 on the tax return (supplementary section).

 

WHAT YOU MAY NEED

·Written evidence. Read for an explanation of the written evidence rule.

 

EXCLAM DEFINITION

A depreciating asset is an asset with a limited effective life and can reasonably be expected to decline in value over the time it is used.

 

YOU NEED TO KNOW

What you cannot claim

You cannot claim deductions for the following expenses:

·self-education expenses that taxpayer incurred if the only income taxpayer received was from youth allowance, austudy, ABSTUDY or similar schemes providing payments in the nature of financial assistance
·self-education expenses for a contribution amount paid to an education provider by taxpayer or by the Australian Government under HECS-HELP
·the cost of meals generally; for when taxpayer can claim the cost of meals, see What you can claim below.
·the repayments taxpayer made, whether compulsory or voluntary, on debts they have under the following student loan schemes:

- Student Financial Supplement Scheme (SFSS)

- Higher Education Loan Programme (HELP)

MORE The Higher Education Loan Programme (HELP) is the student loan scheme that was introduced on 1 January 2005.

HELP has three types of loan:

·HECS–HELP for eligible students enrolled in a Commonwealth supported place
·FEE–HELP for eligible fee-paying students enrolled at an eligible higher education provider or Open Universities Australia
·OS–HELP, which helps students who wish to undertake some of their study overseas.

For more information on HELP, see the Department of Education, Employment and Workplace relations website at www.goingtouni.gov.au

 

What you can claim

You can claim deductions for the following expenses:

·your tuition fees payable under FEE-HELP, provided there was a direct connection between the course and your work activities at the time you incurred the debt even if the Australian Government paid your fees for you under FEEHELP
·self-education expenses paid with your OS-HELP loan, provided there was a direct connection between the course and your work activities  at the time you incurred the expenses
·the cost of meals during an absence from home if:
you were participating in self-education directly connected to your current work, and
that self-education required you to be temporarily away from your home for one or more nights
·other expenses such as textbooks, stationery, student union fees and the decline in value of your computer. If you did not use your  computer solely for self-education purposes, you will need to apportion your deduction. This means you divide the amount between private use and work-related use. For example, if you used your computer 40% of the time for deductible self-education purposes and 60% of the time for private purposes, then you can only claim 40% of the decline in value.
· expenses for travel between:
your home and your place of education
your place of education and your home
your workplace and your place of education, and
your place of education and your workplace.

However, only the first leg of each trip is deductible where you travelled:

from your home to your place of education and then to your workplace, or
from your workplace to your place of education and then to your home.

To work out the amounts of allowable car or other travel expenses, you will need to read question D1 (car expenses) or D2 (travel expenses). However, you must generally claim these amounts here at item D4.

 

$250 reduction

In certain circumstances you may have to reduce allowable self-education expenses by $250. However, you may have other types of expenses - some of which are not allowable as a deduction (see category E in How to work out your claim)-that can be offset against the $250 before you have to reduce the claimable amount for allowable expenses.

 

HOW TO WORK OUT YOUR CLAIM

First list your expenses under the following five categories.

 

Category A

Category A expenses are general expenses that are allowable as a deduction. Include in this category the cost of textbooks, stationery, student union fees, course fees, public transport fares and car expenses (excluding amounts for decline in value) worked out under the 'logbook' or 'one-third of actual expenses' methods.

In some cases you may need to reduce your category A expenses by $250.

 

Category B*

Category B expenses are deductions for the decline in value of depreciating assets used for self-education purposes, including a car for which you are claiming deductions under the logbook or one-third of actual expenses method.

 

Category C*

Category C expenses are expenses for repairs to items of equipment used for self-education purposes.

 

Category D*

Category D expenses are car expenses related to the self-education activities which are claimed using the 'cents per kilometre' or '12% of original value' method. You cannot claim car expenses under this category if he has included deductions for decline in value or repairs to his car under categories B or C.

* You do not have to reduce category B, C and D expenses by $250.

 

Category E

Category E are self-education expenses that are not allowable as a deduction. For example:

·travel expenses in respect of the last leg of each trip:

- from home to the place of education and then to work, or

- from the workplace to taxpayer's place of education and then home

·child care costs related to attendance at lectures or other self-education activities, or
·capital cost of items acquired in 2008-09 and used for self-education purposes - for example, a computer or desk.

 

COMPLETING THIS QUESTION

 

Examples of how to work out a claim

 

EXAMPLE 2

Maureen studied hairdressing at a TAFE college and the course was directly related to her current employment as an apprentice hairdresser.

Her expenses

$

Category

 

Course fees

$180

A

Textbooks

$70

A

Student union fees

$40

A

Total expenses

$290

 

Take away

$250

 

Maureen can claim

$40

 

 

EXAMPLE 3

Ian was unemployed and got a Newstart allowance. He went to a course to gain a second qualification to help his job prospects. Ian cannot claim any self-education expenses as there is no direct connection between the expense and his current income source.

 

EXAMPLE 4

Lachlan was a clerk in the public service who was studying gourmet cooking part time in order to become a chef. Lachlan cannot claim any self-education expenses as there was no direct connection between the expense and his current income source.

 

EXAMPLE 5

Katelin studied full time at a university and received austudy payment as her only source of income.

Katelin cannot claim any self-education expenses as there is not a sufficient connection between the expense and her austudy payment.

 

EXAMPLE 6

Angus studied part-time at a university and the course was directly related to his current employment. He traveled by bus from his work to university.

His expenses

$

Category

Stationery

$10

A

Textbooks

$240

A

Course fees

$200

A

Bus fares

$150

A

Student union fees

$150

A

Repair to home printer

$70

C

Total allowable expenses

$820

 

Self-education expenses not allowable as a deduction:

 

 

Child care costs

$520

E

The general expenses for stationery, textbooks, course fees, bus fares and student union fees are category A amounts. The repair expense is a category C amount.

Angus does not have to reduce his category A expenses as the total of his category C (repairs $70) and E (child care costs $520) is more than $250.

Angus can claim $820 – his category A and C amounts.

However, if Angus had no child care costs then his claim would be worked out using previous steps:

STEP 3 $250 less $70 (the category C amount) = $180

STEP 4 $750 (category A amount) less $180 (step 3 amount) = $570

STEP 5 $570 (step 4 amount) plus $70 (category C amount) = $640

Angus could claim $640.

 

COMPLETING THIS ITEM

You can enter work related self-education expenses directly into the tax return question D4 label D or using the worksheet. Follow the steps if you choose to use the worksheet:

STEP 1

Click on the D4 Work related self-education expenses underlined text to open the worksheet.

STEP 2

Enter the following details in the worksheet:

The brief explanation about the expenses being related to your work. Remember, self-education expenses are NOT allowable if your study was designed to get:
·a job
·a new job - different from the current one,or
·income from a new income-earning activity.
Name of course  - Provide the name of the course that you are undertaking.
Category of expense claimed - The category that you are claiming for the expense. Click on the arrow and select the category that best fits the expense.
Evidence or calculation - The evidence used to calculate the claim. Select from the drop down list.
Institution - The name of the institution where course is being held.
Details of "other" category - If you selected "O Other" as the category then enter the details here
The amounts, percentage of taxable use.

STEP 3

If you are claiming more than one item then click on "New" button and repeat from step 2 for each additional item.

STEP 4

Save and Exit the worksheet. Tax Assistant will calculate the total amount and insert it into D item D4.