Self-education expenses are generally tax-deductible for individuals if there’s sufficient connection with your income-producing activities. However, until new legislation was recently passed, the amount you could deduct was limited by s82A of the Income Tax Assessment Act 1936 so that only the amount spent over a $250 threshold was deductible.

This threshold was an artefact from when the self education deduction measure was first introduced more than 40 years ago, alongside a long-repealed concessional tax rebate of $250. The original intention of the deduction limit was to ensure that taxpayers didn’t receive both the rebate and a tax deduction for the same set of expenses.

With the non-deductible threshold removed, you will only need to ensure the following applies when you claim a self-education deduction:
– You incurred the expense in gaining or producing your assessable income.
– The expense isn’t private, domestic or capital in nature.
– The deduction isn’t prevented by another provision of the tax law (eg such as some childcare and travel expenses that would previously been useable to reduce the $250 threshold).

The changes applies for tax assessments for the 2022-2023 income year and onwards.

CategoryTax Updates

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