Show findcourses.com as: Mobile

The Basics of Professional Development Tax Write Off

Learning doesn’t end once you get a job. With increasing competition and ever-changing industries, it is critical for professionals to continue learning and developing their knowledge and skill set.

That’s where professional training courses come in to play. But did you know that as a professional, you can (in some cases) write off tax for work-related professional development?

As an employee, you can claim your work-related training as a miscellaneous, itemized deduction which reduces the amount of your income subjected to tax. As a self-employed, sole proprietor, you can write tax off as a business expense directly from your self-employment income.

Here we outline some of the basics about which professional development opportunities are actually tax deductible:

Professional Development Tax Write-Off

The Two Tests

Work-related professional development will qualify for tax deduction if it passes one of these two tests:

First test - The education maintains or improves skills required in your current employment, business or area of trade but does not qualify you for other roles or careers (i.e. courses that only equip you with skills directly applicable to your current role).

Second test - The education meets the requirements of your employer, applicable law or regulations (e.g. courses required to maintain working licenses).

Training for your current role only

As mentioned above, tax deductible professional development training must equip you with skills necessary for your current role only and cannot qualify you for a new trade or business.

Even if the training qualifies you for a new career but you do not intend to use it, the opportunity is still there and no one can prove what you will do after obtaining the education. Thus, as a blanket rule, these types of educations are non-tax deductible.

Meeting minimum requirements

Professional development that meets the minimum requirements of your current role (or retrospectively qualifies you for it) does not qualify as work-related education unless the requirements have changed since you were initially hired.

If they are the same, one can assume you were qualified upon being hired and any work-related training from then on must be requirements determined by laws and regulation, professional standards or your employer.

Tax write-off for MBAs

In some cases, tax deduction can depend on your situation. Although MBAs do not qualify you for a new career in the same way that a degree does, never assume that an MBA is tax deductible.

You may still need to provide sufficient evidence that it is not being used to start a new career or line of work. In short, there is no yes or no answer and the IRS should be consulted to determine exactly what the possibilities are.

It depends who's paying for it

Who pays for the education will also be a factor in determining whether or not it is tax deductible. Education paid for by your employer cannot have the tax written off. Only those paid for by yourself will have the opportunity to be tax deductible.

Your employer can pay up to $5,250 a year for you to attend professional development courses without it counting as income. However, this opportunity must be formally offered to all employees for this to count.

Still not sure?

IRS has a simple, easy-to-use 'yes or no' graph to help you determine if your work-related training is tax deductible. They also have a whole section of their website dedicated to the rules and regulations around Business Deduction for Work-Related Education.

Looking for professional training?

Tell us what kind of professional training you're searching for and we'll look through our over 35,000 training company listings and personally get in touch with several training providers. They'll send you more information about the course including price, upcoming dates, and answers to any questions you might have.

This field is used for controlling automatic form submits. Please leave it blank:
Tell us what you're looking for:

This is a cost-free and obligation-free service.

Last updated: 01 Mar 2019

You might also be interested in:

Last updated: 3/1/2019

Why Should You Invest in External Training?

The training industry is a billion-dollar market. In our 2017 US Training Report, we found that in 2016 corporations spent about $39 billion on external training programs alone. Find out why your company can benefit from investing in external training.

Read more
Last updated: 3/1/2019

How People Accidentally Seem Incompetent at Work

Bad habits at the workplace can erode your personal brand and lead to fewer responsibilities at work, and even dismissal. Gain the approval of your supervisor and colleagues by avoiding these pitfalls that make competent professionals sound incompetent.

Read more
Last updated: 3/1/2019

Why Aren't Employees Engaged in Professional Development?

Many companies are working hard to set up learning and development programs. Yet, in some cases there is a disconnect. Learning and development programs are in place, but employees are not engaging with these opportunities. We have come up with four common reasons that employees might not be engaging with the development opportunities their workplaces are providing.

Read more
Last updated: 4/5/2019

Taking a Professional Development Course to Boost Your Career

Professional development courses can benefit your career in several key ways. Learn how professional training can help you excel in your current role and open up pathways to new positions with this article listing key career benefits to staying current with your learning and development.

Read more
Last updated: 3/1/2019

Professional Development Plan Template for Managers

One of your most important tasks as a manager is to help members of your team develop professionally and reach their full potential. Download our professional development plan template for managers and help your employees set and reach goals

Read more
U.S. L&D Report: 2019 - Benchmark Your Workplace Learning Strategy

US L&D report 2019 - Benchmark your Workplace Learning

Are you curious about the L&D strategies of some of the U.S.'s top companies?

Find out what they're up to in findcourses.com's second annual U.S. L&D Report!

Take me to the report

Our newsletter
Leave your email and stay updated on professional training

LOOKING FOR TRAINING?

findcourses.com offers a free consultancy service to help compare training for you and your team

Request a free quote