deducting hecs possible ?

[TheCamel]

So, way out of left field here but,

say you finish school, and head off to uni, and defer payment.
then, you finish uni, say in november, then hunt around and get yourself a job by say jan or feb.
your job is of course directly relatd to your course, and vice versa.

you then pay off your hecs in one lump sum.

Can you deduct this, on the basis that it's educated related to earning your assessable income, or is it knocked back on the fact that its "designed to get you a new job or career"

 

[Mry]

HECS is simply not deductible under any circumstances. s26-20.

(Well, your employer could make the payments and they would be tax deductible to them, but they would have to pay FBT.)

 

[TheCamel]

Easy as then.
thanks.

 

[MarkB]

Mry is right re: HECS.

But, if you're so inclined, when you do postgrad there is some good news.

Last I heard (and I haven't checked this for a couple of years), even if you take out a PELS loan (and dont pay up front) then you can deduct course fees against your income (on the assumption the course was designed to make you better at your current job).

M

 

[Deepmarine]

From what I know HECS isn't tax deductible, but I think that your HELP fee is in the year that it is incurred.

 

[nats12]

not sure if the rules are the same now but when i was at uni it used to be if you were working and studying at the same time and if at that time your study was relevant to advancing you in your current role then you could tax deduct your fees, books etc in that year.

but the key was that you have to pay for it in that year. if you defer your fees to the HECS program, then it's never tax deductible.

not sure if the rules are still the same or have changed but that's when i was at uni.

 

[letiha]

I work as a law clerk/ paralegal full time whilst sudying, i can claim my books cmputer etc but not the course fee's. Howeve when i start my gruaduate diploma in legal practice (so i can be admitted) i can deduct the fee help payments of what will be $6500 from my tax.

 

[Programmer]

Hi letiha,


Did you get a PR on this or was this advice supplied via Accountant?

 

[letiha]

No programmer I did not get a private ruling, its clearly stated on the ATo website and on a few other sites relating to study. see http://www.ato.gov.au/individuals/content.asp?doc=/content/80503.htm
That you can claim FEE Help as a deduction if it relates to your current employment.

The only exception i think to claiming under graduate study is through OPEN University, which you can pay upfront or with FEE Help (with a 20% surcharge for under graduate degrees)

 

[Pushka]

So if I employ my son as our bookeeper (he has already done Accounting in Year 12 and Business Studies) this year and then he studies Accounting at Uni next year, he can deduct his fees from his income if 'he' pays as he goes?

And HELP is the old HECS I think!

 

[kris]

So if I employ my son as our bookeeper (he has already done Accounting in Year 12 and Business Studies) this year and then he studies Accounting at Uni next year, he can deduct his fees from his income if 'he' pays as he goes?

And HELP is the old HECS I think!

It depends.

http://www.ato.gov.au/individuals/c...htm&pc=001/002/008/013/001&mnu=&mfp=&st=&cy=1

As you can see HELP comes as 3 different parts, which are all lumped into your HELP debt (increases by CPI instead of interest and is repaid based on your taxable income).

1. HECS HELP - For Commonwealth government subsidised courses
2. FEE HELP - For fee paying students at approved higher education / open universities (not being subsidised by the government)
3. OS HELP - For studying overseas

The HECS HELP is not deductible. The reason being that these courses dont cost nearly as much as the commonwealth government helps fund the universities.

The FEE HELP would be deductible when its incurred and not when the debt is repaid.

The OS HELP would be deductible the same as the FEE HELP.

 

[Programmer]

No programmer I did not get a private ruling, its clearly stated on the ATo website and on a few other sites relating to study. see http://www.ato.gov.au/individuals/co...tent/80503.htm
That you can claim FEE Help as a deduction if it relates to your current employment.

My interest doesn't relate to Fee-Help specifically. That link specifically refers to Fee-Help. The link also specifies 'If you meet the eligibility requirements for a deduction for self-education expenses...'

You're obviously satisfied that gaining admitance is a requirement of your current employment and that the ATO could not rule that fees incurred for self-ed expenses in gaining entrance are incurred too early to be regarded as incurred in producing assessable income. See TR 98/9.

Cheers,

 

[letiha]

Well in that case, i'll answer the question another way.

Part of the requirement of being admited requires that I complete a specific amount of work experience, which I have been doing, on a paid capacity.

I am also being paid more at work because of the qualification that I am obtaining, which would be considered income producing, and I have been given a 2 year contract based on completing this. Whilst I don't have a private ruling I see no issues with it. Work is also under the same impression, as they are paying for 1/2 the fee's for this course and it does not attract FBT as it is a deductible expense for me even without them paying. I believe that this is common practice with Trainee Solictors.

 

[Programmer]

Certainly sounds like a direct connection to current work then.

Only asked the PR/Accountant question as I too am doing p/grad study...

Cheers,