As a business owner, you probably are barraged by invitations to educational events – free courses and those that cost.
Fortunately, you don’t have to worry about paying for courses; you’re usually allowed a tax deduction for the cost of business education. You just have to be sure the subject is relevant to your existing business.
Education expenses are tax deductions only when the education improves the skills you require for your current job. Business owners and their staff can deduct costs for seminars, conference, and symposiums related to their employment but not, however, for any new business ventures.
If, for example, you’re in the business of selling shoes and decide you want to breed thoroughbred horses, you can’t deduct the cost of a course on racehorses. It would be disallowed even if you actually did become a horse breeder down the road. Your intent for an educational undertaking is irrelevant. All that matters is whether the education improves your existing work.
Also, while your philosophy is to pay for all types of education, you can prevent future problems by alerting your bookkeeper and accountant whenever your business pays for nondeductible personal education.
Meanwhile, enjoy the tax-deductible seminars and conferences that relate to your current business. Even general business education courses count, so why not take an introductory accounting class? You’ll develop familiarity with bean-counter terminology and better appreciate the role of high-level accounting in your business.