Tax tips for teachers

Tax time is here again. Ask any teacher, and they will tell you that plenty of teaching-related expenses throughout the year come out of their own pockets. But which of those costs are tax deductible?

Information contained in this article is of a general nature only and should not be construed as providing tax, legal, financial or accounting advice on any of the topics discussed. Please consult with your financial and/or tax advisor(s) before making any decisions.

To help determine what you can and can’t claim as a teacher, we’ve spoken to the Australian Taxation Office (ATO) about what those working in the education sector can claim versus what is considered a private expense.

In general, there are three things that you need to consider:

1. Have you spent the money yourself and haven’t been reimbursed by your employer?
2. Is the expense directly related to how you earn your income?
3. Do you have a record to prove the expense?

If you answer “yes” to all of these questions, it is likely that the expense is tax deductible.

Keep in mind that if the expense was for both work and private purposes, you can only claim a deduction on the work-related portion.

If you work in the education sector, here are some of the expenses you may be able to claim:

Teaching aids

Whether it’s handouts for students, videos and audio tapes to support your lesson plans, musical instruments or sports equipment, the cost of paying for teaching supplies can add up. The good news is that purchases related directly to your job are generally tax deductible, as long as they are used for work.

However, you can’t claim a deduction for any items you have supplied to students for their own personal use. This includes gifts and paying for the lunch of your students.

Home office

As we all know, teachers spend a great amount of time working from home, marking exams and designing lesson plans. If you spend time working from home, you may be able to claim a deduction for additional running costs that you incur in running your home office.

It’s important to keep a diary of these hours, as work performed from your home office could be a tax deductible expense, even if the area is not set aside solely for work-related purposes.

Generally, an employee who works at home and who does not have a dedicated work area will not be entitled to claim running expenses, or their claim for running expenses will be minimal. This is due to the fact that they can only claim the additional running expenses incurred as a result of working from home.

The ATO’s website has a great case study (example 2) on how to calculate your work-from-home expenses if you don’t have a designated home office.

Clothing and laundry

You may be able to claim a deduction on any occupation-specific clothing that you’re required to wear, although there is a clear line on what is deductible and what is considered a private expense.

For instance, while a physical education teacher may wear sports clothes such as tracksuits, shorts and aerobic shoes to work, these items are not tax deductible – even if your employer requires you to wear them, and even if you only wear them to work.

On the other hand, a design and technology teacher who is required to wear protective gear such as goggles, gloves and hard hats may be able to claim those items if they have to buy them themselves.

Car expenses

While trips between home and work are considered a private expense and are generally not tax deductible, there are some exemptions. For instance, car expenses may be considered a deduction if you use a car you own to transport students to school excursions. You may also be able to claim a deduction for transporting bulky equipment if

• your employer requires you to transport the equipment for work
• the equipment was essential to earning your income
• there was no secure area to store the equipment at the work location, and
• the equipment is bulky or cumbersome to transport.

Renewing your registration

While the initial cost of obtaining your teaching registration is not tax deductible, you can claim the cost of renewing it.

General expenses

Some other expenses you might be able to claim include: union fees, professional memberships and subscriptions, and work-related books, magazines and journals. Donations to registered charities may also be able to be claimed, as long as you haven’t received anything in return for your donation, such as raffle tickets or novelty items.

You might also be able to claim bank fees charged on investment accounts, as well the cost of income protection insurance and any fees paid to your tax agent for preparing your annual return.

When it comes to preparing your tax return, it pays to know what items are tax deductible. To help ease the stress of tax time, have a chat with your tax agent or visit the ATO’s website if you need more clarity around what is deductible. Always keep a thorough record of your paperwork to help make submitting your tax return a seamless process.

This article was originally published in July 2019 and updated in April 2020.