I’m doing a master’s, it’s clearly related to my job so should be tax deductible.
I am using HECS-HELP but am not paying it off using pre tax deductions from my wages but in a lump sum at the end of the financial year (keeps more money in my home loan offset account for longer that way)
Can I claim it as a tax deduction? Says you can’t claim HECS but is that only if you’re paying it off via pre tax contributions?
The key with tax deductions and tuition fees is that the REPAYMENT of any HELP debt is not deductible.
However, when you borrow an amount under the HELP scheme you still incur an expense which may be deductible.
But, incurring amounts in relation to HECS-HELP loans is also expressly made not deductible. This is because HECS-HELP courses are already largely government funded, no further tax deduction is provided.
However, many full-fee courses, particularly postgraduate subjects are actually under FEE-HELP rather than HECS-HELP. As such, there is no prohibition on claiming the initial incurring of the debt as a deduction. However, you need to consider the general conditions for claiming any self-education expenses and establish that it helps you with your skills knowledge in your current job or is likely to result in you increasing your income in your current job. It can’t be to let you qualify to do a completely different job.
Back to the main point. Confirm whether it’s HECS-HELP or FEE-HELP. If it’s a FEE-HELP course and you can claim the deduction, you claim it in the year when you incur the debt, not when you repay it.
This is actually quite generous as you can get deductions years before you repay the debt (or even if your never repay it!)
Probably should refer to this for some general guidance.
It’s HECS-HELP dang it.
I get a pay rise for having a Master’s so it definitely increase my income so would count!
I might see if I can change it to a Commonwealth supported place to get the cheaper price and pay term by term so I can deduct it.
Speaking of HECS repayments - how do you know when you’re done paying it off? Does the ATO or your employer stop taking the payments? Or is it one of those conversations at the end of the FY and get a surprise?
Can check on the ATO app if linked to your MyGov to see your current balance.
Have to tell your employer yourself though
But if you forget and keep paying it you get a nice surprise come tax time.
My wife is still doing this about 5 years after paying off her hecs.
HECS debts got a big whack of interest this year.
Pills household paid off all of theirs.
Yeah, CPI index isn’t normally that harsh, but it was a decent whack at 7.1% this year. And they do it on June 1, just because.
I literally just paid off my final payment yesterday, but Mrs Peos still has a bit left, and the 7.1% was noticable.
Everything is a deduction
Like the guy who runs a recruiting company and used the instant asset writeoff to buy himself a dodge Ram and a Maserati. I’m glad to be funding 25% of those business purchases.
Masersti deduction capped at 64k though.
It’s a bit crook.
Don’t see many tools in utes.
Golf clubs at worst.
Will you just shut up and pay your personal income tax peasant.
I’d definitely keep tabs on it and make sure you tell your employer ASAP. My missus got like 10k paid at end of tax time, would have been great to do other things with that money during the year instead.
I read something about this elsewhere. I’m PAYG so doesn’t impact me, but I’m intrigued.
can businesses buy cars and claim a chunk back on tax?
Cause you’d be able to set your kid up with a business and run all your expenses through that.
yeah kinda. cars (not utes) have a cost limit, 2024 year its about 68k.
youre meant to do an private use adjustment each year via an fbt return but thats a bit hit and miss.
during covid it was like 100k right?