Business

Simple and often overlooked tax deduction that could save Aussies $2,000 this financial year

The little known tax deduction worth $2000 that Australians often ‘overlook’ – but it comes with one condition

  • Data shows 30 per cent of Aussies spend $1,936 on self-education expenses
  • Cost of employment-related learning is tax deductible, saving Aussies hundreds
  • Expense can only be claimed if course has ‘sufficient’ connection to current job

A simple and little-known tax deduction could see Aussies receive a bonus $2,000 this financial year.

New data has revealed at least 30 per cent of Australians are spending up to $1,936 on employment-related learning every year, a cost that is tax deductible.

Accounting for the other 70 per cent of Aussies who don’t spend any of their money on personal education, the average spent each year is about $587.

The Australian Taxation Office (ATO) states that any self-education expenses are deductible if the course has ‘sufficient’ connection to your current employment.

New data has revealed at least 30 per cent of Australians are spending up to $1,936 on employment-related learning every year, a cost that is tax deductible (stock image)

The Australian Taxation Office (ATO) states that any self-education expenses are deductible if the course has 'sufficient' connection to your current employment

The Australian Taxation Office (ATO) states that any self-education expenses are deductible if the course has ‘sufficient’ connection to your current employment

It states self-education expenses are also deductible if the chosen course improves the specific skills required for that role, or is likely to increase your income.

A claim for deduction for self-education that only relates in a general way to your current employment or has been used to retrain for a new role can’t be lodged.

Some other expenses that can be claimed include tuition fees, printer cartridges, textbooks, stationery, home office running costs, phone calls and amenity fees.

Aussies splashing out on employment-related learning can also claim travel costs, including car expenses when traveling between their home and place of education.

Workers can also claim back tax on depreciating assets purchased for over $300, such as laptops and printers or other items that lose their value over time.

Workers can also claim back tax on depreciating assets purchased for over $300, such as laptops and printers or other items that lose their value over time (stock image)

Workers can also claim back tax on depreciating assets purchased for over $300, such as laptops and printers or other items that lose their value over time (stock image)

‘You can get a deduction for the full cost of the asset to the extent that you used it for study in the tax year you bought it,’ the ATO website states.

Expenses that cannot be claimed include tuition or fees that have been paid by someone else or reimbursed by a third-party, accommodation, meals, and home occupancy expenses like rent or mortgage interests.

Along with any formal study, short courses, or online training the cost of content subscriptions used alongside your work, like newspapers or subscriptions to online news sites can generally be deducted.

Australians have been urged to start getting their finances in order as the End of Financial Year (EOFY) approaches on June 30.

Australians have been urged to start getting their finances in order as the End of Financial Year (EOFY) approaches on June 30 (stock image)

Australians have been urged to start getting their finances in order as the End of Financial Year (EOFY) approaches on June 30 (stock image)

Workers can also claim tax on laundry and dry-cleaning expenses if they spent money cleaning occupation-specific clothing, protective clothing and compulsory uniforms during the last financial year.

Deductions can’t be claimed for ‘conventional’ clothing – items that are bought to wear to work – such as business attire worn by office workers or black pants.

The ATO states written evidence that shows the worker bought the clothes, how much they spent and cleaning costs might be required when lodging a claim.

Aussies can also take advantage of other work-related expenses like internet or phone bills or the cost of a Covid-19 test that was required to attend work.

‘From 1 July 2021, if you’re an employee, sole-trader or contractor and you pay for a Covid-19 test for a work-related purpose, you can claim a deduction,’ the ATO states.

Advertisement

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button