Article Date:
February 2010

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Business Education Tax Guide

Lori Singleton-Clarke beat the IRS in court to win her $14,787 business education deduction.1 This is what she spent during one of three years while earning her MBA online from the University of Phoenix.


Ms. Singleton-Clarke represented herself in the small case division of the Tax Court because she did not have the money for a lawyer.2 She won her case because she explained it well and had the required documentation.


Your Government Wants to Help You


Because you are in business, there is no end to what you need to know. Your government recognizes this business-knowledge problem and, wanting to help you learn more, will even help pay the way.


So what knowledge do you need that you do not have? Do you need new skills? Improved skills? More knowledge? For example, do you need to know



how to fly an airplane?


how to play tennis?


how to find more customers?


how to make your computer software work better?

Your government will help, if the education meets the qualification standards for deduction. That’s what this article is about—helping you qualify your educational needs for deductions.


The Business Education Deduction Rule


We have condensed the truckload of rules into one basic business education deduction rule: You may deduct education that maintains or improves the skills you need in your business, providing the education does not qualify you for a new business.3


A careful reading of this definition discloses the following:



You must already be in the business for which you are seeking the education or the skills improvement.4


You are not considered to be “in the business,” even though you might be working in the business, if you have not met the minimum educational requirements for that business; therefore, the education in question must not be entry-level education necessary to qualify ... Log in to view full article.

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