Investing in Yourself - Tax Deductions for Self Education for Psychologists As a psychologist, staying up to date with the latest research, techniques, and professional development is essential—not just for your clients, but for your own career growth. The good news is that many of these self-education expenses may be tax-deductible. In this article, we’ll explore what counts as a deductible expense, what doesn’t, and how to make the most of your self-education claims at tax time. The Australian Tax Office has some clear guidelines about the type of self education you can tax deduct. The self-education must either: maintain or improve the specific skills or knowledge you need to perform your  current  employment activities      or                      result in (or be likely to result in) an increase in your income from your  current  employment activities.   I've included a few examples at the end of this article that may clarify things for your situation. In addition the ATO requires that: You must have spent the money yourself and not have been reimbursed You must have a record to prove it. Keep your receipts! You can only claim the study‑related portion of an expense   For example,  your computer may be for study use as well as private use.  You will need to work out how much you use it for study and how much you use it privately.  Then you can claim the study related portion the cost of your computer as a tax deduction.   You can deduct a range of things related to your self education.   Course related expenses Course and tuition fees (including those payable under FEE HELP) Textbooks Academic journals Student union fees Student services and amenities fees Equipment costing less than $300 e.g., printer, desk Computer or laptop Computer repairs Internet and data usage (excluding connection fees) Phone calls Postage Photocopying Stationery e.g. notebooks, pens, printer ink, paper Home expenses You can also deduct additional running expenses if you have a room set aside for self-education purposes.  This could be things such as the cost of heating or cooling the room while you are studying in it.  Note that you  cannot  claim your mortgage, rent or council rates. You can use the cents per hour method or the actual cost method to record these expenses. If you’re not sure which method to use,  your accountant can advise you.  Travel expenses Accommodation and meals if you are away from home for your study for one night or more You may be able to claim travel from home or work to your place of study and car expenses, but the rules are rather complicated so best to check with your accountant. Depreciation You can also claim the decline in value of depreciating assets costing more than $300 which you use for your study such as your printer, desk, office chair Loans Fees paid on some study loans Interest on a loan to pay tuition fees  Interest on money you borrow to buy a computer  Note: Prior to the 2022-23 tax year the first $250 of education expenses was not deductible, however this was abolished in the recent federal budget. The important thing to keep in mind for Self-education deductions is that they can only be claimed if the course relates to your  current  employment. You   can't claim a deduction  for self-education and study expenses that: don't have a sufficient connection to your current work activities only relate in a general way to your current employment you incur when you are not employed enable you to get new employment or change employment    Here are some examples based on the questions that psychologists often ask me about self-education deductions: Example 1 Cara Cara is a psychologist working for a busy city clinic.  She has decided to continue to work full-time and to study part-time for a Master’s in Psychology.  As this is directly related to Cara’s current employment and it will improve her skills and earning capacity, she will be able to tax deduct her self-education expenses.  After the first three months, Cara realises that she’ll need more time to study.  She continues to work 2 days a week.  As she is still employed as a psychologist Cara can still claim a tax deduction her self-education expenses.  At the start of the second year of her Master's degree Cara decides to dedicate herself to study.  She stops working and studies full-time.  As Cara is no longer “improving the specific skills or knowledge she needs to perform her  current  employment activities”, she would not be entitled to claim her self-education expenses for the second year.  This would also be the case if Cara were to work part-time, or full time, in a job that is not psychology, for example as a receptionist ( even if it is at the psychology firm).  Example 2 Ian Ian is a psychologist working in large hospital.  He becomes very interested in drug treatments for mental illnesses and decides to study medicine with the aim of becoming a psychiatrist.  Although psychiatry and psychology are both professions specialising in mental health, this course would not improve Ian’s skills or knowledge for his  current  employment.  His self-education expenses for his medical degree would not be tax deductable. Example 3 Alicia Alicia is a psychologist and one of the owners and directors of ABC Psychology Pty Ltd. Alicia decides to study for an MBA and ABC Psychology Pty Ltd will foot the bill. In this case Alicia is not paying for the studies herself so she cannot tax deduct the tuition costs of her self-education.  However, ABC Psychology Pty Ltd will be able to claim the deduction as training expenses. If Alicia were paying for the course herself, she would be eligible to claim her self-education expenses connected with the MBA as a tax deduction because the MBA is connected with her current employment. Example 4 Breana Breana is a psychologist and one of the owners and directors of ABC Psychology Pty Ltd. She takes a self-development course which has classes in leadership, self-confidence, communication, and positivity.  Leadership is directly related to her current position as a director.  The other three subjects only relate in a general way to her current employment as a company director.  Breana can apportion and claim 25 % of the costs of she incurs taking the course.