Resources:
- Topic 513 – Educational Expenses
- 2011 Form 2106 – Employee Business Expenses
- Instructions for 2011 Form 2106
Why YOU Should Care:
If you pay for education to hone your professional skills you may qualify to deduct the related expenses (e.g., tuition, supplies, books, fees, materials, etc.).
What Qualifies?
To be deductible, the expenses must be for education that:
- Maintains or improves your job skills, or
- Is required by your employer or by law to keep your salary, status, or job.
For example, if you are a hair stylist and must take annual courses on maintaining a clean and hygienic work space, these educational expenses may be deductible. However, educational expenses do not qualify if their purpose is to train you for a new trade or business. If you work full-time as a lawyer and are taking classes at night to train as a graphic designer, these classes likely would not qualify.
Education Expenses for Employees
If you are an employee of someone else, these expenses are only deductible to the extent they are unreimbursed by your employer.
Qualifying education expenses should be reported on your Form 1040, Schedule A as a miscellaneous itemized deduction. The amount is subject to a limit of 2% of your adjusted gross income (meaning that you cannot deduct an amount greater than 2% of Line 37 of your Form 1040).
Complete Form 2106 to quantify additional Employee Business Expenses.
Education Expenses for Self-Employed Individuals
If you are self-employed, education expenses would be reported on Form 1040, Schedule C.
