WHK August 2010 eNewsletter.

WHK ACCOUNTANTS AND FINANCIAL PLANNERS

 

Claiming Education Expenses


As expected at this time of year, the Education Tax Refund has generated a lot of interest. So I thought I might go into more detail on the type of things you can claim.

You must first be eligible for Family Tax Benefit A. You can make your claim in your tax return or if you donít need to lodge, you can lodge a separate claim form which is available on the ATO website. For those that forgot to claim it last year, you can request an amendment to last yearís tax return or for non-lodgers you can complete the 2009 Education Tax Refund form.

For each primary school child you can claim a maximum of $390 and for high school children a maximum of $779. For each $1 you spend on eligible expenditure you will receive a 50 cent refund, up to the maximum amounts. So for a high school student you would need to spend $1,558 to claim back the $779 refund. If you have more than one child you can spread the expense across each of the children (providing it is used by each of them for their education). This allows you to claim large expenses and get the maximum refund. Should the expenses exceed the limit, the remainder can be carried forward to the next year.

The type of expenses you can claim include: a laptop computer, desktop computer, extended warranty, virus software, surge protector, printer, consumables, IPad, Internet connection, stationery, computer repairs, school text books, educational computer software, general software ie: Microsoft Office, and trade tools for secondary trade courses.

The items must be used by your child for their school education. But they donít have to be used solely for their education and there is no apportionment between private and education use. So even if you used these items 50% for private use, you can still claim the whole expense. However, if you are already claiming some of these items as a tax deduction in your business or in relation to your employment, then that portion of the expense is not claimable for the Education Tax Refund.

If you share the care of your child with a former spouse, then you reduce the amount otherwise claimable by the percentage of care provided by your former spouse. For example, if you have 70% care of your child then you can only claim 70% of the amount otherwise calculated. However, you can carry forward the excess to the next year.

Items that you can not claim include: school fees, uniforms, excursions, tuition fees, musical and sporting equipment, building levies, library fees, subject levies, school photos, tuck shop, donations, computer games, computer desk and chairs.

If you have any tax questions drop me an email at: David.Hall@whk.com.au

This advice is general in nature and readers should seek specialist advice before making financial decisions. WHK Pty Ltd ABN 84 006 466 351
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This newsletter is provided by WHK and its member firms and WHK Financial Planning (WHKFP) as an information service only and does not constitute financial product advice. WHK & WHKFP provide no warranty regarding the accuracy or completeness of the information. All opinions, conclusions, forecasts or recommendations are reasonably held at the time of compilation but are subject to change without notice by WHK & WHKFP. Both WHK & WHKFP assume no obligation to update this document after it has been issued. Except for any liability which by law cannot be excluded, WHK & WHKFP, its Directors, employees and agents disclaim all liability (whether in negligence or otherwise) for any error, inaccuracy in, or omission from the information contained in this document or any loss or damage suffered by the recipient or any other person directly or indirectly through relying upon the information.

Section 945A of the Corporations Act requires financial planners to obtain information from clients before making recommendations. Equivalent requirements apply also to accountants in relation to the provision of taxation advice. Accordingly, clients and readers should not act only on the basis of material obtained in this newsletter because the contents are of a general nature and therefore do not take into account each personís individual circumstances and may be liable to misinterpretation. Do not act upon any of the information contained within this newsletter without first obtaining specific advice from your local WHK Adviser.

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