Business Deduction for Work-Related Education
Business Deduction for Work-Related Education
If you are an employee and can itemize your deductions, you may be
able to claim a deduction for the expenses you pay for your
work-related education. Your deduction will be the amount by which your
qualifying work-related education expenses plus other job and certain
miscellaneous expenses is greater than 2% of your adjusted gross
income. An itemized deduction may reduce the amount of your income
subject to tax.
If you are self-employed, you deduct your expenses for qualifying
work-related education directly from your self-employment income. This
may reduce the amount of your income subject to both income tax and
self-employment tax.
Your work-related education expenses may also qualify you for other
tax benefits, such as the tuition and fees deduction and the Hope and
lifetime learning credits. You may qualify for these other benefits
even if you do not meet the requirements listed above.
To claim a business deduction for work-related education, you must:
- Be working.
- Itemize your deductions on Schedule A (Form 1040 or 1040NR) if you are an employee.
- File Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Schedule F (Form 1040) if you are self-employed.
- Have expenses for education that meet the requirements discussed under Qualifying Work-Related Education, below.
Qualifying Work-Related Education
You can deduct the costs of
qualifying work-related education as business expenses. This is
education that meets at least one of the following two tests:
- The education is required by your employer or the law to keep your
present salary, status or job. The required education must serve a bona
fide business purpose of your employer.
- The education maintains or improves skills needed in your present work.
However, even if the education meets one or both of the above tests, it is not qualifying work-related education if it:
- Is needed to meet the minimum educational requirements of your present trade or business or
- Is part of a program of study that will qualify you for a new trade or business.
You can deduct the costs of qualifying work-related education as a
business expense even if the education could lead to a degree.
Education Required by Employer or by Law
Education you need to meet the
minimum educational requirements for your present trade or business is
not qualifying work-related education. Once you have met the minimum
educational requirements for your job, your employer or the law may
require you to get more education. This additional education is
qualifying work-related education if all three of the following
requirements are met.
- It is required for you to keep your present salary, status or job.
- The requirement serves a business purpose of your employer.
- The education is not part of a program that will qualify you for a new trade or business.
When you get more education than your employer or the law requires,
the additional education can be qualifying work-related education only
if it maintains or improves skills required in your present work.
Education to Maintain or Improve Skills
If your education is not
required by your employer or the law, it can be qualifying work-related
education only if it maintains or improves skills needed in your
present work. This could include refresher courses, courses on current
developments and academic or vocational courses.
