Under what conditions, if any, does university coursework qualify for tax deductability?

Question

It seems to me (I could be wrong here) that the fees and expenses of college coursework (i.e. books, tuition, etc) can be deducted from your taxes IF the coursework is for the purpose of finding a new job, or changing employment, etc.
Again, I might be wrong, but I'm curious if this is the case. And if so, how does one prove this to the IRS?

If not, does university schooling ever qualify for tax deductability?

Thanks.

Answer 1

ONLY the costs for course work that will help you retain or advance in your current field of work are deductable. If the course is to help you find jobs in another field then it isn't.

You have to keep all the receipts of course tuition, purchase of books, supplies etc.

If you are using Schedule A to Itemize your deduction:
First make sure the cost passes the above test
Then add up education cost + tax preparation cost + investment cost (safe deposit box cost, interest paid for investment etc)
If the sum is greater than 2% of your adjusted gross income (AGI)then the amount exceeding 2% of your AGI is deductable. See Line 20 - 26 of Schedule A.

For most people who don't have enough deductions to itemize, the education expenses don't really affect their tax returns.

Answer 2

If the course work directly relate you getting a job, or keeping the job, then you may deduct. However, there is a 2% limit, which means you can only deduct the amount that is over the 2% of adjusted gross income. Also IRS has specific categories of what is qualified education. I know for example, continuing education cost that attorneys have to pay would NOT qualify. How? I don't know. Check the specific document on the IRS web site.

Answer 3

I'm not an accountant--if this doesn't make sense when you look at your 1040a or 1040, ask one.

Tuition and other expenses are deductible--there is a box for it. Also, if you are a freshman or sophomore, there is a tax credit (better than a deduction) you can take. Also, student loan interest is deductible. I claimed it on my taxes using 1040A and the book that comes with it--the instructions were pretty straightforward. Go to a tax preparer if you can't find it on your own--the deduction will probably pay for the fee and then some.