Online courses tax deductible when changing careers?

Question

I left the property casualty insurance business after 20 years. I am 40 and want to change careers & become a dog trainer due to my love and talent for it. Can I pay $3500 in courses and write it off on taxes in Massachusetts. Appreciate any help because I cant go back to insurance!!!!!

Answer 1

At the first glance, there are a number of potential places where you might deduct your training. However, most likely none of them applies in your situation.

Tuition and fees deduction (line 34 of 1040) and Education credit (line 50, either Hope Credit or Lifetime Learning Credit) are only applicable if your training is provided by an eligible educational institution, i.e. college, university, vocational schools, or other institutions eligible to participate in student aid program administered by the Department of Education.
See IRS Publication 970 http://www.irs.gov/publications/p970/index.html

Job Expenses (Line 20 Schedule A) is used for ordinary and necessary expenses that are common and accepted in your current field of trade, business, or profession. A training that will help you look for a job in another field is not considered by IRS an ordinary and necessary expense.
See IRS Schedule A instruction
http://www.irs.gov/instructions/i1040sa/ar01.html#d0e1537

I don't know about Massachusetts state income tax. As far as federal tax, you can't deduct $3500.

Best wishes.

Answer 2

The link below is IRS publication 970 and titled: Tax Benefits for Education. I didn't see anything about on-line courses. The closest I could find is on page 59 under Business Deduction for Work-Related Education. It states that expenses do not qualify if they are part of 'a program of study that will qualify you for a new trade or business."

Maybe you can find a deduction I missed.

Answer 3

Irs website:
Generally, you can claim the lifetime learning credit unless
Your filing status is married filing separately.
You are listed as a dependent in the Exemptions section on another person's tax return (such as your parents').
Your modified adjusted gross income (MAGI) is $53,000 or more ($107,000 or more in the case of a joint return).
You (or your spouse) were a nonresident alien for any part of 2005 and the nonresident alien did not elect to be treated as a resident alien for tax purposes.

Answer 4

Whether the courses are online or in a classroom doesn't matter.

For federal, you might be able to take part of the tuition as a lifetime learning credit. I don't know the rules for Massachusetts.

Answer 5

The rule is that you can deduct education that improves 'current' job skills. Training for a new career is NOT deductable. If you are making money as a dog trainer you could argue it is improving job skills. OItherwise, no way.

Answer 6

I don't know about State but you can with Federal providing your income isn't over a certain limit. Check your local state tax laws...

Answer 7

In Iran they pay for your sex change, and then behead you! In the USA, they just change the sex on your drivers license!