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Deductions for educational expenses

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Updated: 1/10/2008 11:29 am
In order to deduct education costs, the IRS requires the following three conditions be met: First, you have to be employed or self-employed. Second, you must meet the minimum educational requirements of your job, business, or profession. And third, the course should maintain or improve your job skills, or you must be required by your employer or by law to take the course to keep your present salary or position. As long as those requirements are met, it doesn't matter if the courses lead to a degree. The cost of courses preparing you for a new profession or for meeting the minimum requirements for your job are not deductible, even if you take them to improve your skills or to meet your employer's requirements. And, if your education expenses qualify, you may be eligible for a Hope credit or a lifetime learning credit. In addition, the modified adjusted gross income limit has increased. You can also withdraw from your traditional or Roth IRA without penalty to pay for higher education expenses and contribute to an education IRA without penalty for a child under the age of 18. For additional information about education expense deductions, please refer to IRS Publication 970, Tax Benefits for Education. These tips are provided to give you general information about your taxes. If you have specific questions, please consult a tax advisor or call the toll- free number for Federal Tax Information and Assistance at 1-800-829-1040.
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