Tax time savings for learners

Did you know that learners can be eligible to make study-related expense claims at tax time? With the end of financial year for the 2020/21 period nearly here, now is the time to make sure you know what’s what when it comes to tax savings and your studies.

On top of deductions related to your course, there are also many work-related expenses that you can claim at tax time. With the Covid-19 pandemic’s impact, there are many expenses specifically related to working from home that can be claimed.

Knowing these details when it comes to tax time as a learner can ensure that you get the right amount of tax returned to you.

Getting organised for EOFY

Hopefully you’ve been pretty organised throughout the past year when it comes to EOFY. This can go a long way toward maximising your tax deductions — and that could mean more money back in your bank account.

If you haven’t been organised for tax time, there’s still time to get everything sorted. It’s also worth considering putting together a system that will help you keep on top of your income and expenses ongoing. This might be using an app, a physical filing system like a plastic sleeve folder, or organising folders on your computer or email.

If you’re wondering what sorts of things you will be filing and keeping track of, here’s an idea:

PAYG Payment Summaries

These used to be called group certificates, and they are a document provided to you by your employer that outlines how much money you earned, how much tax was withheld and how much superannuation you were paid.

Previous tax returns

It’s good to keep track of your earnings and tax records, and tax returns can show you how much tax you have been getting back each year.

Bank statements

Matching up receipts and invoices to your bank statements is called doing a bank reconciliation. This ensures you are across all the money going in and out of your bank account. It can help you to spot any unusual or unexpected charges too.

Receipts for relevant expenses

If you make a purchase that is study or work-related, you may be able to claim them as tax deductions when you lodge your tax return. Keep reading for more on which receipts you might want to keep.

Tax savings for learners

Taking on a course and any study-related expenses is a worthwhile investment no matter what. However, if you keep track of what you’re spending to support your studies, you might find that you can claim some of your expenses as tax deductions at EOFY.

According to the Australian Tax Office, there are a number of self-education deductions that you can claim provided you meet the criteria:

  • you are improving specific skills or knowledge you use in your current employment
  • you’re a trainee employee and the course you are undertaking forms part of that traineeship
  • you can show that at the time you were working and studying, your course led, or was likely to lead, to an increase in employment income

Potential tax deductions for learners

So what kind of expenses can you potentially claim as tax deductions? Here’s a few to keep in mind:

  • Your course fees (only if you paid them yourself)
  • Textbooks
  • Internet connection and usage (if you’re studying online)
  • Running expenses if you have a study set aside for self-education purposes (e.g. heating, cooling and lighting during the time you are studying)
  • Stationery such as planner, highlighters, notebooks and pens
  • Computer consumables including printer cartridges
  • Trade, professional or academic journals
  • Decline in value of computer and other equipment (also called depreciation, and can apply to desk, chair, bookshelves and more)

Work from home tax deductions

If you’ve been supporting yourself by working while you study, don’t forget to also include your usual work expenses when it comes to your tax claims.

For some, this may have changed over the last year due to the pandemic which saw many people shift to working from home. The Australian Tax Office recognises the additional expense this can bring at home, such as using lighting, furniture, heating and more. Keep in mind, if your employer provided these things for you, you cannot claim.

To make it easy, the ATO has introduced the ‘shortcut method’ until June 30, 2021 to help you streamline your work from home tax deduction claims. This means employees working from home can claim 80 cents per hour for each hour worked from home during the current financial year.

Get it right at tax time

Getting it right at tax time is important, so if you’re not quite sure what you are eligible to claim it’s worth contacting a tax professional or visiting the ATO website for more information.

Make sure you are clear on what you might be able to claim to maximise your tax return for your individual circumstances.

The information above is general information only and does not constitute professional advice. Get in touch with the ATO or a tax professional to learn more about how this information applies to your individual circumstances.

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