If you work and incurred work-related self-education expenses, you may be eligible for a tax deduction.
For self-education expenses to be tax-deductible, there must be a “sufficient connection” between your current employment and the course you undertake. Generally, you are more likely to be eligible to claim deductions if you work and study at the same time and your situation falls into one or more of the following categories:
- You are upgrading your qualifications for your current job.
- You are improving the knowledge needed for your current job.
- You are a trainee and the course is part of your traineeship.
- Your course led, or is likely to lead, to an increase in salary.
The tax office interprets the “sufficient connection” requirement for eligibility strictly. For example, if the course you undertake is generally related to your current position but the job does not require the knowledge you gained from the course, then you cannot deduct self-education expenses. Please consult your tax adviser for more information in your situation.
Provided there is a sufficient connection between your course of study and employment at the time you incurred the expenses, examples of deductible self-education expenses include:
- Tuition fees;
- Textbooks and professional journals;
- Stationary;
- Computer expenses; and
- Accommodation and meals if the course requires you to be away from home.
This list is far from exhaustive. Also, there are complications and specific rules for certain items. For example, some tuition fees are deductible, some are not. Please consult your adviser for details. Below is a list of some of the more complex deductible self-education expenses and their related rules.
Computer Expenses
You can only claim the work-related study portion of computer expenses. E.g. interest on money borrowed to purchase the computer, costs of repair, and depreciation are deductible only to the extent of the computer was used for work-related study and not private use. Your tax adviser can explain the rules for apportionment. Generally, computer upgrades are not repairs and therefore not deductible. However, you may claim the cost of an upgrade as part of the depreciation of the computer. Consult your tax adviser for the depreciation schedules.
Interest on Borrowings
If you borrowed money to pay for deductible self-education expenses, you can claim a tax deduction for the interest on the loan.
Depreciation
The tax office generally allows depreciation deductions for assets that have a limited life and are expected to decline in value over time. Examples of assets for which you can claim depreciation deductions if they are used for work-related study purposes include:
- Computers;
- Professional libraries;
- Desks, chairs, desk lamps, filing cabinets, bookshelves; and
- Tools and other equipment.
Depreciation expenses are complex and there are various ways they can be calculated depending on the type of assets. Consult your adviser in order to maximize your eligible deduction.
Accommodation and Meals
Accommodation and meals are generally considered private and not deductible. However, if you participate in work-related study and are required to be away from home for one or more nights, you can usually claim the cost of accommodation and meals.
Home Study Expenses
If you have a room set aside for work-related study purposes, you may be able to claim depreciation and repair expenses related to home office furniture. You may also be able to claim a portion of the utility expenses for the period you use the home office for work-related study. Alternatively, the tax office allows you to use a fixed rate per hour of usage instead of keeping individual costs for the expenses above.
Travel Expenses
When you use a car or public transport, you can generally deduct the cost of travelling to and from your place of education. But the rule is quite complicated. For example, you cannot deduct the cost of the last stage of your travel:
- From home to your place of education and then to work; and
- From work to your place of education and then to your home.
If you use public transport, keep a record of the fares paid. If you use a car, you can use one of four methods to calculate your travel expenses. Your tax adviser can provide all of the details.
Source: https://www.checkpointmarketing.net/
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