It’s tax season. Are you ready? As you’re considering the key deductions that can help improve your return this year, make sure you aren’t missing out on self-education expenses. Are you currently in school or following another program of study? Have you spent the year working on vital certifications that help make you more employable? If so, there are several key expenses that you can claim–and some surprising ones you can’t. As you prepare to file your taxes, make sure you check out this key guide to claiming your education expenses.
Actual School Expenses
Are you attending a college, university, or other institute of higher learning? If so, you can claim the cost of those classes as part of your tax deduction. Keep in mind, however, that if you’re attending school, your course of study needs to relate to your current employment. For example, as a nurse, you might pursue an elevated degree in nursing; however, you can’t include courses that you’re taking for your own interest, like a karate class or history course.
Work-related conferences are a great way to keep your skills sharp, network, and keep up with the latest advances in your field. You can improve your career, enhance your connections, and, not so incidentally, claim those conferences as part of your tax deductions. Not only do the conference fees themselves count but you can also claim your travel expenses: the cost of airfare or gas and your hotel room, if relevant. Like college and university expenses, your conference claims need to be for conferences actually related to your industry. That video game conference may have been the most fun you had all year, but unless you’re a video game designer, it doesn’t count as a business expense.
Are you moving toward an advanced certification? Heading in for a seminar? Like conferences, seminars can be claimed under educational expenses on your taxes. In addition to the cost of the seminar, you may consider travel and lodging expenses while you’re taking the class.
Are you attempting to improve your professional standing by gaining additional certifications? If so, those certifications may be included as part of your educational expense claims. You’ll especially appreciate the ability to claim courses related to your certification. If you must attend a course away from home long-term, your lodging expenses may be included as part of your certification efforts, as are any travel-related expenses associated with taking that certification–if, for example, you have to go out of town in order to take the certification exam.
Education doesn’t just involve the actual cost of the course or seminar. There are often other expenses associated with those opportunities, many of which can add up fast. Here’s the good news: in addition to the actual cost of your course, conference, or seminar, you can often claim related expenses on your taxes, including:
The cost of books and materials. If you were required to have it for a class, you can probably claim it as part of your educational expenses. Keep in mind that this is the cost of books and materials directly related to the class, not those that you picked up for personal purposes.
Your laptop. Did you need to purchase a laptop to go back to school or to take advantage of your educational opportunities? If that laptop is used solely or primarily for school-related purposes, it may be included as an educational expense.
Living expenses. Was it necessary for you to work away from home for a period of time in order to complete a course of study? If so, those expenses may be included as educational expenses. This includes everything from staying in a dorm to needing to live out of a hotel or rent another property for the duration of your course. Living expenses do not, however, include the normal cost of living in your usual property.
What Counts as a Self-Education Claim?
Education tax credits are incredibly valuable as you attempt to file your taxes this year, but you want to be sure that you aren’t claiming education credits that aren’t yours to claim to avoid problems in the future. Make sure your claims fit the right circumstances in order to ensure a smooth filing process.
Education credits are for expenses you paid for. If, for example, your employer pays for a portion of your educational expenses, that amount doesn’t count as an educational tax deduction for you. If your employer reimbursed you for expenses that you paid for out of pocket up front, those expenses also shouldn’t qualify.
Education credits should relate to your field of employment. Whether you attended a seminar in another field or took college courses just for your own interest, those items do not relate to your career and should not be included as part of your educational tax deductions. You can use those expenses to improve your standing in your current career field, or you can use them as a trainee to help improve your overall understanding of your field.
Education expenses do not include expenses you would have incurred anyway. The cost of meals, for example, is not included as part of your education tax credits. While you may be able to include part of your internet cost, if you use the internet primarily for personal purposes, it’s probably not an education expense.
There’s no substitute for education in your life when it comes to furthering your professional chances and making it easier to achieve your professional goals. As you attend conferences, seminars, and classes throughout the year, you’re adding considerable knowledge that will ultimately help you further your career. At the same time, you’re adding up tax credits that will help you when you file your taxes at the end of the financial year. Are you struggling to put together your taxes this year or to assess what counts as an educational credit and what doesn’t? If so, contact us today. We’ll help advise you on how to put together your taxes in an effective, simple way that will help you take maximum advantage of as many of your educational expenses as possible.