If you’re an employee, you can deduct the cost of education that:
Maintains or improves the skills required for your present job.
or
Is required by your employer.
Example: You work for a store repairing televisions, radios, and stereo systems. To keep up with the latest changes in technology, you take a couple of courses in television and stereo repair. Because these courses maintain and improve skills you use in your job, you can deduct education expenses.
You can’t deduct education expenses if the course isn’t related to your job or qualifies you for a new trade or profession. You also can’t deduct expenses if you’re required to take classes to meet the minimum educational requirements in effect when you first obtained the job.
Example: You work as a nurse’s aide, and you’re currently enrolled in a college to become a registered nurse. Because the nursing courses that you’re taking qualify you for a new profession, you can’t deduct your education expenses.
To deduct education expenses, you must itemize deductions on Schedule A, and your deductions must exceed the 2% threshold for miscellaneous deductions.
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 don’t meet the requirements listed above.
Also, keep in mind that your work-related education expenses may qualify you to claim more than one tax benefit. Generally, you can claim any number of benefits as long as you use different expenses to figure each one.
If you’re self-employed, you can deduct the cost of education related to your trade or business on Schedule C. You must be able to prove that the course:
Maintains or improves skills that you need in your trade or business.
or
Is required by law or regulation for keeping your license to practice in your trade or profession.
For example, attorneys can deduct the cost of attending Continuing Legal Education (CLE) classes that are required by the state bar association to maintain their license to practice law.
You can’t deduct education expenses that you incur to meet the minimum requirements of your present trade or business, or those that qualify you for a new trade or business. This is true even if the education maintains or improves skills presently required in your business.
You can deduct the following expenses:
Tuition, books, and fees
Equipment and other expenses associated with obtaining the education -- For example, you can deduct research and typing expenses that you incur while writing a paper for a class.
Transportation expenses -- You can deduct the cost of travel between your workplace and the school. If you return to work after class, you can deduct round-trip expenses. You can also deduct public transportation costs.
You can’t deduct the following expenses:
Travel as a form of education -- For example, let’s assume that you’re a high school Spanish teacher, and you take a trip to Spain to improve your knowledge of the Spanish language and culture. Since the trip itself is an educational activity, you can’t deduct your travel expenses.
The dollar value of vacation time or annual leave that you took to attend classes
Many deductible work-related education expenses may also qualify for other education credits or deductions, such as an education credit, the tuition and fees deduction, or as an employee business expense. It’s important to look at the tax savings of each method to maximize the benefit on your return.
For more information on education expenses, check out the following resources: