Improving Your Knowledge
May Be Tax-Deductible
by Ginita Wall, CPA, CFP

Going back to school or taking courses to enhance your knowledge for your job may be tax deductible.

You may deduct the cost of all education you acquire to maintain or improve your existing job skills or to meet the express requirements of your employer to keep your job.

But you can’t deduct the educational expenses you may incur to meet the minimum requirements for your job, or to qualify you for a new job.

For Example:  if you work as a paralegal, you may deduct course in which you learn more about law, but you may not deduct the expenses of attending law school, since these will qualify you for a new job as an attorney.

Educational expenses include tuition, books, fees, travel, professional dues, magazine subscriptions, etc. But they are deductible only if you itemize your deductions, and they are deductible only to the extent that they exceed 2% of your adjusted gross income for the year.

Even if your education expenses are not currently deductible, your expenditures for books may be deductible in the future.

For example: the books that you buy during law school will be useful to you in your law practice. You may be able to depreciate your library costs once you begin working if you can substantiate these costs. Ask your tax adviser for more specific guidance.