$1,936 tax deduction you didn't know you could claim

Don’t overlook this common deduction when doing your tax return. (Source: Getty)

Aussies who spent money on their self education and professional development last financial year may be able to claim a tax deduction of nearly $2,000.

According to McCrindle research, nearly a third of Aussies spend an average of $1,936 on professional education each year. This can include things like course fees, textbooks and stationery.

Financial adviser and founder of Pivot Wealth Ben Nash said many Aussies didn’t realise they could add these expenses to their tax return.

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“The most overlooked tax deductions I see are around self education and professional development, which can often run into thousands of dollars of tax deductions every year,” Nash told news.com.au.

Here’s how it works.

When can I claim self-education expenses?

The Australian Taxation Office (ATO) says you’ll need to show the self-education expense has a “sufficient connection” to you earning income from your employment.

This would be the case if it maintains or improves the specific skills or knowledge that you need for your job, or if it will likely result in you getting a pay rise from your current employment.

You can’t claim a deduction if you are not employed or if it only relates to your employment in a general way. So, if you undertook a fashion photography course and were working as a casual sales assistant, this wouldn’t cut it.

It also can’t be education you do to get a new job or change jobs - such as moving jobs from a nurse to a doctor.

What self-education expenses can I claim?

If you meet the eligibility criteria, the ATO says you can claim a deduction for the following expenses:

• Tuition, course, conference or seminar fees

• General course expenses, such as textbooks and stationery

• Decline in value of depreciating assets, such as computers, desks or tools

• Car and other transport expenses

• Accommodation and meal expenses if you need to travel and be away from home for one or more nights

• Interest on borrowings

How much can I deduct?

The ATO has a handy self-education expenses calculator that you can use to work out your eligibility and estimate your deduction.

Remember, you’ll need to have records for all the self-education expenses you incur. You’ll also need to be able to explain how the course directly relates to your work at the time you incurred the expense.

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