Tax deductions for students with a cadetship (1 Viewer)

[liltiki]

So its tax time... and after much debate with my friends I am asking the board to see if anyone else can shed any light...

I study full-time at university, and do not have a part-time job as such, but I have a cadetship with a company who I am contracted with and pays me money which I use towards textbooks and equipment for my course, and when I graduate, I am contracted to work with them for at least 2 years.

Am I entitled to claim any deductions for textbooks and equipment here?

I have friends that argue I can - because I am contracted to the company and I am getting paid, and these expenses are related to job that I am contracted to work for them for (even though I am technically not actually doing any work for them yet - but the point is im being paid income), but I am trying to find something at the ATO that states something before I put any down on my return.

 

[townie]

the general gist of claiming expenses is that the expenses must have been incurred in assosciation with earning income. If you are being paid income by a company, and your study is directly related to your CURRENT field of employment, then you should be able to claim.

So if your degree is related to the company you work for, u would be making a legitimate claim i think


the ato website puts it better

Self-education expenses are expenses that you incur when you undertake a work-related course to obtain a formal qualification from a school, college, university or other place of education.

The course must have a sufficient connection to your current employment, that is, the course:

-maintains or improves the specific skills or knowledge you require in your current employment, or
-results in, or is likely to result in, an increase in your income from your current employment.***

You cannot claim a deduction for self-education expenses for a course that does not have a sufficient connection to your current employment even though:

-it might be generally related to it (see example 1), or
-it enables you to get new employment.

Example 1

Louis, a computer science student, works at the university laboratory installing computers. The course and the job are generally related, and what Louis learns might help him in his job.

However, the high level professional skills Louis acquires are well beyond the skills required for his current job and employment. Consequently there is not a sufficient connection between his job and his course, and he cannot claim a deduction for work-related expenses for his course.

***i think u satisfy this criteria, but more information about the company and your course, and your CURRENT ROLE would be good

 

[liltiki]

Thanks,
Well I study Optometry and so when I graduate I will be employed as an Optometrist by the company and I am already contracted for that. And I receive a set income from them each year of my degree which I use to cover textbook and equipment expenses. My only worry about it is that is this enough to claim the equipment etc in deductions since until I finish my degree I am not technically working for them... I am only getting money from them.

 

[liltiki]

Also I signed the contract with them April 2008 so I was already under contract when the expenses occurred in the 2008/2009 financial year.

 

[loquasagacious]

Sounds like you would be eligible for the tax deduction. Are you recieving YA? Based on a court ruling earlier this year that would also make you eligible.

 

[babikakez]

Are you recieving YA? Based on a court ruling earlier this year that would also make you eligible.

Not from the perspective of the ATO.
Anstis v FCT

 

[liltiki]

Yeah I also have YA but I wasn't gonna deduct anything based on that income... I was just looking at it from the cadetship income point of view. But thanks for your input!