Are educational expenses deductible on my tax return?
(Revised January 2013)

Through year 2013, you are entitled to a deduction on your tax return for the cost of post-high school education of up to $4,000 regardless of whether the education was job related.

Other Educational Expenses

Educational expenses are also deductible if the courses help you maintain or improve your skills in your present occupation. If the education will qualify you for a new trade or business, they are not deductible. This type of expense is deductible as an itemized deduction under "miscellaneous deductions."

If the education is the actual travel, the expenses are not deductible under any circumstances. An example of educational travel would be a French teacher traveling to France to improve his/her language skills. If the travel was incurred to attend a university, the teacher may be able to deduct the travel expenses. Deducting foreign travel is a complicated sujbect.   Again, you need professional advise on this topic and should speak with us or your personal tax advisor.

Generally, to take this type of deduction you have to itemize, since educational expenses are classified as a '
miscellaneous deduction'. This category of deductions is subject to the alternative minimum tax.  For information on this very complicated area, press here.  

Again, this type of deduction usually need the help of a tax professional.  

There are a number of tactics that will result in getting more tax savings with your educational expenses, assuming you are going to incur job related educational expenses.  For example, you could ask your employer to pay the cost of your tuition under an employer tuition plan, even if it means a pay cut equal to the tuition payment. Tuition payments (under a plan) of up to $5,250 per year are not subject to either income or social security taxes. The employer should also save on taxes, since the tuition plan payments should be exempt from payroll taxes. Also, in many cases the new American Opportunity Tax Education Credit
, which will be in effect for years through 2017, may be more beneficial.

Again, education expenses are a very complex area, and they involve a number of alternatives. You need to consult with us or your personal tax advisor

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