Education Expenses

Reader Julie R. asked:

I have educational expenses that are allowable under IRS tax regulations, but can’t for the life of me figure out where to list them on Schedule C. Could you tell me which line they go on? 

Education expenses are, indeed, deductible or are eligible for an Education Credit.

For the purposes of answering the question as it was perceived to be asked, we will assume the education expenses are for the owner of the business, and are NOT necessary to achieve the minimum requirements for the position for which the education expenses were incurred.

We can turn to the very helpful Internal Revenue Service website: IRS.gov
IRS Publication 535, Business Expenses “Other Expenses”

Education expenses. … You can also deduct the cost of your own education (including certain related travel) related to your trade or business. You must be able to show the education maintains or improves skills required in your trade or business, or that it is required by law or regulations, for keeping your license to practice, status, or job. For example, an attorney can deduct the cost of attending Continuing Legal Education (CLE) classes that are required by the state bar association to maintain his or her license to practice law.

Education expenses you incur to meet the minimum requirements of your present trade or business, or those that qualify you for a new trade or business, are not deductible. This is true even if the education maintains or improves skills presently required in your business.

Continuing Professional Education expenses are frequently placed on line 10 (Commission and Fees). These amounts paid for CPE could also be placed on line 17 (Legal and Professional Fees). If the taxpayer wants to completely segregate education expenses, they could be listed on Part V (Other Expenses).

If the education expenses were incurred for one or more employees, then the costs are most correctly listed on line 14 (Employee Benefit Programs).

If the education expenses are for the owner and they are to gain the proper credentials to perform the services of the business, then see IRS Publication 970, Tax Benefits for Education.

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About Maesz

Glenna Mae Hendricks. She is an entrepreneur and income tax consultant, so we get lots of good tax tips from her. She is an oenophile (“look that up in your Funk and Wagnall’s,” she says), and a wine enjoyment teacher/guide who also writes wine notes at the Allen’s Retail Liquors site. Her political thoughts (and occasional outbursts of domesticity) appear at Old Feminist and Wild-eyed Liberal.

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