Education Tax Refund
by Graham Lalor, Taxation Accountant
For those of you who incur education expenses, it might be worth giving us a call regarding the Education Tax Refund (also referred to as the Education Expenses Tax Offset) to see if you are eligible for this benefit. The Education Tax Refund applies if you or your partner incurred eligible education expenses from 1st July 2008 for the primary or secondary school studies of:
• A child, or
• Yourself (under 25 years old)
Eligible education expenses include:
• Laptops, home computers, repair and associated running costs
• Printers, USB, flash drives, repairs and running costs
• Home internet connection
• Computer software
• School textbooks
• Tools of trade
The claim limits for 2008/09 are:
• For primary school students – up to a maximum claim limit of $375 per child per year
• For secondary school students – up to a maximum claim limit of $750 per child per year
The amount of the offset is the lesser of:
• half of the eligible expenses incurred for an eligible child each year, and
• the maximum claim limit
Bear in mind, if half of your eligible expenses are more than the maximum claim limit, then the difference between these two figures can be carried forward into the next financial year.
To receive this benefit, on the day you or your partner incurred the expense in respect of the child, you must receive, or be eligible to receive, the Family Tax Benefit Part A.
Scenario 1 - Primary School
Sarah receives the Family Tax Benefit Part A and spends $500 on computer software for her son’s primary school education in July 2008. The eligible education expense is $500. The eligible education tax offset amount is $250 ($500 divided by 2), as this is less than the maximum claim limit of $375.
Scenario 2 - Secondary School
Jack receives the Family Tax Benefit Part A and spends $2,500 on a computer, software & printer for his daughter’s secondary school education in November 2008. The eligible education expense is $2,500. The eligible education expense amount is $1,250 ($2,500 divided by 2). As the total eligible Education Tax Refund amount of $1,250 is greater then the maximum offset amount of $750, then the Education Tax Refund Jack will receive will be $750, as this is the lesser amount. But remember, Jack can carry forward the remaining $500 into the next financial year.
It's important you receive the full tax benefits you're entitled to - which you possibly may not be claiming nor receiving when you're preparing your own tax return, or even when it's prepared by external accountants. A John Hopkins Taxation Accountant can assist you with determining exactly what you can claim for, whether it be educational expenses, property, car, business or a range of other options.
It’s money in your pocket at the end of the day, so call our office today to arrange an obligation free appointment with one of your specialised Taxation Accounts.
For more information, or to arrange an appointment with a John Hopkins Taxation Accountant, please contact our Client Liaison Officer on 1300 726 082 or click here.