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Posted by Beej on March 19, 2007, 11:12 am
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Publication 970 clearly states that I can deduct education
expenses as part of being self-employed. Does this cost go
on Schedule C as a business expense or Schedule A as a
deduction?
Thanks
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Posted by Paul Thomas, CPA on March 20, 2007, 1:47 am
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> Publication 970 clearly states that I can deduct
> education expenses as part of being self-employed.
> Does this cost go on Schedule C as a business
> expense or Schedule A as a deduction?
If the education expenses are qualified business expenses,
they fall on Schedule C.
--
Paul Thomas, CPA
paulthomascpapc@bellsouth.net
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Posted by bono9763@yahoo.com on March 20, 2007, 1:47 am
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> Publication 970 clearly states that I can deduct education
> expenses as part of being self-employed. Does this cost go
> on Schedule C as a business expense or Schedule A as a
> deduction?
It depends :-). There are four places you can deduct
education expenses for the average taxpayer and a fifth one
for self-employed Sch. C filers.
1. Hope credit
2. Lifetime learning credit
3. Tuition and fees deduction
4. Schedule A, employee expenses subject to 2% of AGI
5. Schedule C business expenses.
The first two are credits to your tax and are reported on a
separate form, which carries to page 2 of the 1040. #3 is an
adjustment to income on page 1 of the 1040. These all have
restrictions, in regards to types of expenses deductible,
types of institutions eligible, or type of student.
#4 is restricted to work-related education, but the
education can't qualify you for a new job, it must be
related to what you are employed as now.
If your education was related to your self-employment, it
can be deducted as a business expense. I usually call it
Continuing Education, listed under other expenses on page 2
of the Sch. C. This has the added advantage of reducing your
SE tax, also.
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<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
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<< to this newsgroup as well as our anti-spamming policy >>
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Posted by Frederick Lorca on March 20, 2007, 1:47 am
Please log in for more thread options > Publication 970 clearly states that I can deduct education
> expenses as part of being self-employed. Does this cost go
> on Schedule C as a business expense or Schedule A as a
> deduction?
IRS discontinued Publication 508, Tax Benefits for
Work-Related Education, in 2003. I liked Pub. 508 because
the rules therein clearly differentiated work-related
education expenses from expenses routinely incurred by
ordinary post-secondary education students.
The rules for deducting work-related education expenses
haven't changed so you can read about them in the 2002
edition of Pub. 508.
http://www.irs.gov/pub/irs-prior/p508--2002.pdf
Qualifying work-related education is explained on page 2 and
there is a flow chart (Figure A) on page 3 you can use to
determine if your education expenses qualify to be deducted
on Schedule C.
Frederick Lorca
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<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
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Posted by Harlan Lunsford on March 20, 2007, 1:47 am
Please log in for more thread options Beej wrote:
> Publication 970 clearly states that I can deduct education
> expenses as part of being self-employed. Does this cost go
> on Schedule C as a business expense or Schedule A as a
> deduction?
No, not just any "education expense". Only for those
courses which pertain to your schedule c type business.
For example if I were still filing a schedule c, no way I
could deduct a course in Greek art. So if you have several
courses, deduct the business related ones on schedule c, and
then go for the lifetime learning credit for others.
ChEAr$,
Harlan Lunsford, EA n LA
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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