If I am starting my own business, and decide to go to Grad School....?

Question

can I write off my Grad School tuition as a business expense (for Tax purposes)?

Answer 1

No, because you still not going any place!! After you go to Grad school, than you can!

Answer 2

Education expense can be deducted on your schedule C or form 2106-Employee Business Expense if the education is to maintain or improve your current skills in your present trade or occupation. Education that qualifies you for a new trade or profession is not a deduction on your business schedule or as employee business expense. Your tuition may qualify for the Lifetime learning credit or as a tuition deduction on your tax returns, just as they would for any other student.
The rules regarding what maintains and improves your skills versus what qualifies you for a new trade or profession are quite narrowly written and you should consider some accounting help to interpret them. The difference is not as clear as it might seem.
Interesting information: Some of the cases that have been to tax court in this area involve IRS employees who were accountants. They went to night school and obtained law degrees. Since that maintained and improved their skills and allowed promotion in their jobs it seemed like a good deduction. Since it also qualified them for a new trade or profession (attorney) the deductions for education were not allowed.
For educators the rules seems a bit more in favor of the taxpayer. A classroom teacher could deduct the cost of education leading to becoming a school principal since that is still considered the same trade or profession.