You enroll in a course that helps you do your job better – can you claim a tax deduction for the course fees? Yes
You enroll in a course that is for a new career – can you claim a tax deduction? No
What’s the difference?
Years ago when I was working as a management accountant I knew I wanted to transfer to the Training & Development Department. I started taking courses that would help me selected for one of the newly created roles (I wrote about how I eventually successfully made the transition in a previous post “You’re an accountant, you don’t belong in Training and Development”) Of course the course fees were not an allowable deduction on my tax return because my courses had nothing to do with helping me be a better accountant. My CPA course on the other hand was an allowable deduction.
For the cost of the course to be claimable deduction there needs to be a clear link between how you currently derive your income and the education being undertaken.
For Example: if you are a lawyer and you want to open a flower shop so you enroll in a course about flowers and running a flower shop the cost of the course is not a deductible expense.
In addition if you are studying to open up new opportunities in the future and at this stage it is too early for their to be clear new income the deduction is generally not allowable. Example: the receptionist in a medical center is studying to be a physiotherapist.
To claim the deduction you need to be able to demonstrate the clear link between the current income and the course of study or education; whether a course, on-line, conference, seminar, study tour etc
This is a question I am often asked in my work with Business StartUps. If in any doubt or seeking further clarification as always, I recommend people check with their individual Tax Accountant for clarification in their personal circumstances.
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