How to Deduct Continuing Education Expenses

We get a lot of questions regarding tax-deductions for continuing education, in particular around the time we place tickets on sale for the Summit. So this year, we asked our accountant, Joel K. Arline CPA, Managing Member of Arline & Wiggins, CPAs, LLC, to help us understand when and how to deduct the cost of continuing education.

Is continuing education deductible?

If the cost of the continuing education maintains or improves skills you use on the job or that is required to maintain your job, it is deductible.

What can I deduct?

1. Cost of the class or conference
2. Cost of the hotel
3. 50% of the cost of meals on your trip
4. Buses, taxis, subway rides, airplane flights, and tips
5. Mileage if you are driving (2019-2020 mileage rate is 58 cents per mile) or actual auto expenses if your company owns your automobile

Can I bring my spouse or a friend?

This is deductible only if they work for you or your company or have a business purpose for being on the trip (i.e., assisted with your presentation or took notes at classes you could not attend, etc.).  You may want to compensate them for attending the trip to support their purpose for being at the conference.  This a planning opportunity, please call us or your tax advisor.

How do I deduct these costs?

Employees:

If your employer reimburses you for your trip or conference, you cannot take the write-off on your personal tax return.  If you are not reimbursed or are partially reimbursed, you are no longer allowed to deduct these expenses. (planning tip: work out an arrangement with your employer to reimburse you, it will save them taxes also!).

Sole Proprietors or Single Member LLC owners:

You will deduct the total cost on your Form 1040, Schedule C.

LLCs, Partnerships, S-Corporations, C-Corporations owners:

Your business would deduct these costs on its tax return (Form 1065, 1120S, 1120).  If you paid for any of these expenses personally, please have your company reimburse you.

More questions or need a CPA? Contact Joel at joel@arlinewiggins.com.