Students often find themselves struggling financially as they juggle work and study. That is why we have compiled a list of the tax deductions that students can claim if they are completing studies for their current job. Want to know what a uni student can claim on tax? Read on!
What is your taxable income?
Taxable income is the money you earn, generally from your work from your employer, that you need to pay tax on. Taxable income includes the following:
- PAYG summaries
- Pensions and government allowances
- Interest earned (banks etc)
- Dividends
- Rental property income
- Business income
- Other income earned (capital gains etc)
What qualifies as a tax deduction?
For an expense to qualify as a tax deduction, it must meet the following three requirements:
- You must have spent the money and not have been reimbursed
- It must be related to your job
- You must have a record to prove it
A tax deduction reduces your taxable income meaning you’re taxed less.
Tax deductions for Students
As a student you are generally juggling, study, work and a busy social life! Below are a few common tax deductions for students who are working either full time jobs or part time jobs.
Education Expenses
You are eligible to claim self-education expenses as deductions if you meet one of the following:
- You looking to upgrade your existing qualification for your current job. For example, upgrading to a Master’s degree from a bachelor’s degree.
- You are using your study to improve skills and knowledge about your current job. For example, a café employee takes a barista course.
- The course you are undertaking is part of a traineeship, and you are a trainee.
- Your course leads to an increase in income at your current job.
You cannot claim self-education expenses as deductions for any of the following reasons:
- Your study is not related to your work activities
- You incurred your studies whilst unemployed
- The reason for your study is to obtain a new job
- You are on a student visa
If you are eligible to claim self-education or study expenses, you may be entitled to deductions for general course deductions, depreciating assets, and travel expenses.
A lot of uni students will work or study part time which opens up opportunities for a student tax deduction for education expenses.
General course deductions
General expenses you can claim:
- Meals
- Travel expenses
- Course & tuition fees (does not include HECS-HELP)
- Phone calls
- Textbooks
- Equipment or technical instruments that cost $300 or less
- Repair costs for equipment
- For more general deductions, visit: https://www.ato.gov.au/Individuals/Income-and-deductions/Deductions-you-can-claim/Self-education-expenses/
Expenses you cannot claim:
- Course or tuition fees that are paid by someone else or you are reimbursed.
- Higher Education Loan Program (HELP)
- You generally cannot claim repayments on student loans, such as HECS and VET.
- Occupancy expenses for working at home, such as rent or mortgage.
It is important to note that the first $250 of your education expenses is not deductible.
Depreciating assets
You can claim the depreciation of assets that are used for self-education purposes such as a computer.
You can claim the entire cost of an asset that is $300 or less if it is used for self-education purposes. If the asset costs over $300, you can only claim the depreciation value of the asset.
Travel and vehicle expenses
If your self-education requires traveling from your home or workplace to your place of education, you may be entitled to a deduction on your tax return. If travelling via public transport, keep a record of the fares you pay. If you are travelling via car, you can use the cents per litre method or the logbook method to track your expenses.
For more information regarding vehicle expenses, visit: https://oneclicklife.com.au/claiming-vehicle-expenses-for-individuals/
You can claim travel expenses for the following:
- Travel between your workplace to the place of education (uni or tafe or other)
- Travel between your home to the place of education
You can only claim a full trip when traveling between two places but not three. For example, you cannot claim a full trip if you travel from home to work, then to your place of education. You are only able to claim half of the trip. To claim a full trip, you must travel between two locations.
General tax deductions
General tax deductions that may apply to you are set out below. These are the basic tax deductions that most individuals are able to claim on their Tax Return.
- Work related phone bills,
- Work-related computing,
- Work from home costs,
- Insurances for work related equipment and Income protection insurance,
- Rental expense for your home office portion (if you are renting and require a home office),
- Charity donations and gifts,
- Sun protection (if you must work outside), and
- Tax agent and financial advisor fees.
Maximising your Tax Return with an online tax agent
There may be more tax tips and tax deductions for students that aren’t included in this blog. Tax deductions are not only industry-specific but also change from individual to individual.
One Click Life is a fast and easy way to claim the most you can from your Tax Return so you can enjoy more of the things you love. Your Online Tax Return can be done in 60 seconds and is overseen by one of our pros.
The best part is, OCL’s fees are tax-deductible meaning you get back even more on your tax. What more could you ask for?
How easy and stress-free is that?
Taxes, Health Insurance, Lending and Wills can be time-consuming and tedious. Our app allows you to be able to do this fuss-free, giving you a simple way to organise, track and manage all your financial life admin in one place.