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Continuing Education: Key to success in the fast-moving world of tax preparation

And it can be deductible!

Continuing education is key to enhancing your current skills and your growth as a tax professional. Not only is it an excellent investment in your future, but continuing education can also be tax deductible.

This is doubly important for the tax professional who wants to claim these deductions and needs to keep up with the latest tax regulations and strategies to advise clients on how to take advantage of these valuable deductions at tax time.

What expenses are deductible?

The Internal Revenue Service (IRS) allows some individuals to deduct certain expenses related to maintaining or improving skills needed in their current work, such as:

  • Cost of work-related tuition and courses
  • Tuition and books
  • Supplies, lab fees, research and typing costs
  • Certain transportation costs related to education

Eligibility

The IRS has specific requirements for determining whether continuing education expenses are deductible. The education must:

  • Maintains or improves skills needed in your current work
  • Be required by your employer or the law
  • Not qualify you for a new trade or business
  • Not be part of minimal educational requirements

In addition to self-employed individuals, educational expense deductions are available to disabled individuals with impairment-related education expenses, armed forces reservists, fee-based state or local government officials, and qualified performing artists.

Many education-related tax deductions and credits phase out at specific Adjusted Gross Income (AGI) levels, so it is important to carefully review your eligibility for any deduction or credit.

Eligibility also varies by state. If you meet certain criteria, the costs associated with California CTEC certification, including the 60-hour qualifying education course, can be deductible.

Education Tax Credits

In addition to continuing education tax deductions, tax preparers should explore education-related tax credits such as the Lifetime Learning Credit (LLC) and the American Opportunity Tax Credit (AOTC). These are particularly relevant to post-secondary college expenses incurred while attending college or university pursuing a degree or certification. Certain continuing education credits would only qualify for the LLC and not the AOTC. Both credits are claimed on Form 8863. The instructions for this form will help you understand which credit you qualify for. 

Reporting Your Education Expenses

If you’re self-employed, report education expenses on Schedule C (Form 1040) or Schedule F (Form 1040).

Remember to keep detailed records of your education expenses and be prepared to document them for the IRS and state tax authorities.

For more information, look at IRS Publication 970, Tax Benefits for Education, or visit the Tax Benefits for Education: Information Center.

Continuing education can be both enriching and financially advantageous. By understanding the rules and leveraging available tax benefits, you can invest in your learning journey while minimizing tax liability.