| Along with working, you are attending night school or you are taking occasional courses at the local community college. Someone in class mentions that he is "going to write the whole thing off," and it starts you wondering. Are you eligible for any deductions for the cost of your education?
The answer to that question, like most questions about taxes, depends on many things. If you are an employee, you may be able to deduct the costs of qualifying work-related education, but only if you itemize instead of taking a standard deduction. The deduction allowed would be the amount by which your work-related education costs plus other job and certain miscellaneous expenses exceed two percent of your adjusted gross income. If they don't exceed this floor, no deduction is allowed.
If you are self-employed, you may deduct the costs of work-related education directly from your self-employment income.
Qualifying Work-Related Education
In order to have deductible unreimbursed business costs, you must be employed or self-employed. If you are absent for work for less than a year in order to get education to maintain your skills and then return to the same general line of work, the education received during this time qualifies as work-related. You must already meet the minimum educational requirements of your present job or profession. The minimum educational requirements may be set by law, by professional standards, or by an employer. The course you are taking must be of the kind that maintains or improves your job or professional skills or is required by your employer to stay in your present position AND it cannot lead to qualification for a new job or profession. If your employer requires the course you are taking but it qualifies you for a new profession, it is not a deductible work-related expense (but it may qualify the taxpayer for other educational tax relief).
Bar or CPA review courses are not deductible work-related courses because they are part of a program of study that prepares you for a new profession. In addition, travel as a form of education is not deductible even if it is directly related to your job or profession.
Deductible Expenses
If the courses taken qualify as work-related education, deductible expenses included tuition, textbooks, lab fees, equipment, and other required expenditures.
Deductible travel expenses include one-way or round-trip local transportation costs (bus, subway, train, car, etc.). If you are required to stay away overnight attending a qualified course, you may deduct the cost of travel, lodging, plus half of the cost of meals. You may not deduct any personal expenses incurred during the time away from home, including sightseeing, entertaining, and extensions of the trip.
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