A teacher’s guide to tax deductions
Each year, our many teacher friends and blog readers ask, “What can teachers claim at tax time?” The reason behind this question is that some of you may or may not know that Jodie (one-half of Tomorrow’s Teacher) was a Taxation Accountant in another life before she found her passion in education.
Education is empowering, especially when it comes to your own personal finances. You are likely incurring allowable tax deductions throughout the financial year without realising it. As teachers, we understand that, unfortunately, individual teachers incur costs due to schools’ budget constraints and restrictions. These costs, where we spend the money for our job and where it is directly related to earning our income, are what you may be eligible to claim as tax deductions. We have all been there, adding just one more pack of sticky-notes at the Officeworks checkout. Alternatively, if you are anything like co-founder Lauren, you may have kept receipts for every shopping spree and be shocked when you realise you can’t claim those items in your tax return! Given the pressure of today’s rising cost of living, it is important to stay up to date with what you can and cannot claim at tax time.
Therefore, we have written this blog to help you understand how tax deductions work for teachers and provide a list of items you may be eligible to claim at tax time. Please check if any items are relevant to your situation since this blog is not financial advice. Every teacher’s income and financial situation differs, and we are not qualified to give specific financial advice (or any!). This advice is general in nature, and we highly recommend seeking financial advice from your Accountant.
What are tax deductions?
A tax deduction is an expense that you can subtract from your taxable income. By claiming these deductions, you can reduce the amount of income subject to taxation, potentially resulting in a lower tax liability or a higher tax refund.
Allowable deductions can include various expenses that are necessary for your work. However, it is important to note that the specific allowable deductions can vary from year to year and depend on tax laws and regulations.
To claim an allowable deduction, you typically need to keep accurate records of your expenses, including receipts and supporting documentation, to substantiate your claims. It is advisable to consult with a qualified tax professional and refer to the guidelines provided by the Australian Taxation Office to understand which deductions apply to your specific circumstances and to ensure compliance with the tax laws.
Sample Tax deductions for teachers
Classroom Expenses: As an educator, you often spend your own money on essential classroom supplies and resources. Fortunately, the ATO allows you to claim a deduction for these expenses. This includes items such as stationery, teaching aids, educational software, and other materials necessary for your teaching activities.
Professional Development: Continuous professional development is crucial for teachers to stay up to date with the latest teaching techniques and knowledge. The expenses incurred in attending workshops, conferences, seminars, or courses directly related to your teaching profession can be claimed as tax deductions. This may include registration fees, travel expenses, accommodation, and meals. Ensure that the professional development activities are relevant to your current role and you have incurred the cost yourself. You cannot claim if your employer has paid or you are reimbursed for this expense.
Union Fees and Professional Memberships: If you are a member of a teaching union or professional association, the fees you pay for membership are generally tax-deductible.
Home Office Expenses: If you are required to work from home, you may be eligible to claim deductions for home office expenses. These can include a portion of your bills, internet costs, home office equipment (such as computers, printers, and furniture), and even depreciation of assets.
Travel Expenses: If you are required to travel for work-related purposes, such as attending meetings, training, or school excursions, you may be entitled to claim travel expenses.
Car expenses: This includes driving to and from an alternate workplace for the same employer on the same day – eg driving from your school to another school to moderate exam results.
Self-Education Expenses: If you undertake additional studies or courses to enhance your teaching skills or gain further qualifications, you can claim deductions for self-education expenses. However, the course must be directly related to your current profession or help you maintain or improve your skills in your existing role.
Other expenses: phone and internet costs, with records showing your work-related use, the cost of seminars and conferences, teaching aids, technical or professional publications, union and professional association fees, personal protective equipment you buy, such as gloves, face masks, sanitiser or antibacterial spray, if your job requires.
Cost of managing tax affairs
To help you identify what tax deductions you may have, we have prepared the following Teacher Tax deduction checklist: This is a free download for you to use to guide your tax deductions. Remember to check your personal situation with the relevant law. ACCESS FREE TEACHER TAX DEDUCTION CHECKLIST HERE
Happy tax season!
Recommended reading:
https://www.ato.gov.au/uploadedFiles/Content/IAI/Downloads/Toolkits/TaxTimeToolkit_Teacher.pdf
Disclaimer: Please note that the information provided in this blog post is intended for general informational purposes only and should not be considered as financial or tax advice. Every individual's financial situation is unique, and tax regulations can vary. You should consult a qualified tax professional or financial advisor to understand the specific deductions applicable to your circumstances and ensure compliance with the Australian Taxation Office (ATO). Tomorrow’s Teacher are not liable for any damages or losses arising from your reliance on the information provided herein.