Can I deduct the cost of classes I need for work? ALABAMA'S # 1 TAX SERVICE

In some cases you may be able to deduct the cost of classes you need for work.

• If you are an employee, this deduction is subject to the 2 percent of AGI limitation, along with most other miscellaneous itemized deductions you list on Schedule A (Form 1040) (PDF), Itemized Deductions.
• If you are self-employed, this deduction reduces your level of taxable income subject to income and self-employment tax.

The deduction as a work-related expense is limited. This education must meet at least one of the following two tests and not be limited by other factors:

• 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.

Additional Information:

• Publication 970, Tax Benefits for Education, Chapter 12
• Tax Topic 513, Educational Expenses

 

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