1997 Tax Help Archives  

Educational Expenses

This is archived information that pertains only to the 1997 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.

You may be able to deduct work-related educational expenses of up to $5250 as an itemized deduction on Form 1040, Schedule A. To be deductible, your expenses must be for education that:

  1. Maintains or improves skills required in your present job; or
  2. Serves a business purpose and is required by your employer, or by law or regulations, to keep your salary, status, or job.

Your expenses are not deductible if the education is required to meet the minimum educational requirements of your job or is part of a program that will lead to qualifying you in a new trade or business.

Although the education must relate to your present work, educational expenses incurred during vacation or other temporary absence from your job may be deductible. However, after your temporary absence you must return to the same kind of work. Usually, absence from work for one year or less is considered temporary.

Educational expenses include amounts spent for tuition, books, supplies, laboratory fees, and similar items. They also include the cost of correspondence courses and tutoring, as well as formal training and research you do as part of an educational program. Transportation and travel expenses to attend qualified educational activities may also be deductible.

The exclusion does not apply to education that qualifies you for a new trade or business or is needed for meeting the minimal educational requirements for your present position. The reimbursement will not be reported by the employer as income to you in Box 1 of Form W-2. If you are an employee and are not reimbursed by your employer or the reimbursement was included as income, or you you have transportation or travel expenses related to your education, you must complete Form 2106 or Form 2106EZ. Educational expenses are deducted on Schedule A, Form 1040, as miscellaneous itemized deductions subject to the 2% of adjusted gross income limit. For new information on the 2% limit, see Topic 508.

Self-employed individuals include educational expenses on Schedule C or C-EZ, Form 1040.

For more information on this topic, order Publication 508, Educational Expenses, by calling 1-800-829-3676. Information about other educational incentives can be obtained by ordering Publication 553, Highlights of 1997 Tax Changes.

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