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1040ez free online 12. 1040ez free online   Business Deduction for Work-Related Education Table of Contents What's New Introduction Qualifying Work-Related EducationEducation Required by Employer or by Law Education To Maintain or Improve Skills Education To Meet Minimum Requirements Education That Qualifies You for a New Trade or Business What Expenses Can Be DeductedUnclaimed reimbursement. 1040ez free online Transportation Expenses Travel Expenses No Double Benefit Allowed How To Treat ReimbursementsAccountable Plans Nonaccountable Plans Deducting Business ExpensesSelf-Employed Persons Employees Performing Artists and Fee-Basis Officials Impairment-Related Work Expenses Recordkeeping Illustrated Example What's New Standard mileage rate. 1040ez free online  Generally, if you claim a business deduction for work-related education and you drive your car to and from school, the amount you can deduct for miles driven from January 1, 2013 through December 31, 2013, is 56. 1040ez free online 5 cents per mile. 1040ez free online For more information, see Transportation Expenses under What Expenses Can Be Deducted, later. 1040ez free online Introduction This chapter discusses work-related education expenses that you may be able to deduct as business expenses. 1040ez free online To claim such a deduction, you must: Itemize your deductions on Schedule A (Form 1040 or 1040NR) if you are an employee, File Schedule C (Form 1040), Profit or Loss From Business, Schedule C-EZ (Form 1040), Net Profit From Business, or Schedule F (Form 1040), Profit or Loss From Farming if you are self-employed, and Have expenses for education that meet the requirements discussed under Qualifying Work-Related Education , later. 1040ez free online What is the tax benefit of taking a business deduction for work-related education. 1040ez free online   If you are an employee and can itemize your deductions, you may be able to claim a deduction for the expenses you pay for your work-related education. 1040ez free online Your deduction will be the amount by which your qualifying work-related education expenses plus other job and certain miscellaneous expenses (except for impairment-related work expenses of disabled individuals) is greater than 2% of your adjusted gross income. 1040ez free online An itemized deduction reduces the amount of your income subject to tax. 1040ez free online   If you are self-employed, you deduct your expenses for qualifying work-related education directly from your self-employment income. 1040ez free online This reduces the amount of your income subject to both income tax and self-employment tax. 1040ez free online   Your work-related education expenses may also qualify you for other tax benefits, such as the American opportunity and lifetime learning credits. 1040ez free online You may qualify for these other benefits even if you do not meet the requirements listed above. 1040ez free online   Also, your work-related education expenses may qualify you to claim more than one tax benefit. 1040ez free online Generally, you may claim any number of benefits as long as you use different expenses to figure each one. 1040ez free online Qualifying Work-Related Education You can deduct the costs of qualifying work-related education as business expenses. 1040ez free online This is education that meets at least one of the following two tests. 1040ez free online The education is required by your employer or the law to keep your present salary, status, or job. 1040ez free online The required education must serve a bona fide business purpose of your employer. 1040ez free online The education maintains or improves skills needed in your present work. 1040ez free online However, even if the education meets one or both of the above tests, it is not qualifying work-related education if it: Is needed to meet the minimum educational requirements of your present trade or business, or Is part of a program of study that will qualify you for a new trade or business. 1040ez free online You can deduct the costs of qualifying work-related education as a business expense even if the education could lead to a degree. 1040ez free online Use Figure 12-1, Does Your Work-Related Education Qualify as a quick check to see if your education qualifies. 1040ez free online Education Required by Employer or by Law Once you have met the minimum educational requirements for your job, your employer or the law may require you to get more education. 1040ez free online This additional education is qualifying work-related education if all three of the following requirements are met. 1040ez free online It is required for you to keep your present salary, status, or job, The requirement serves a bona fide business purpose of your employer, and The education is not part of a program that will qualify you for a new trade or business. 1040ez free online When you get more education than your employer or the law requires, the additional education can be qualifying work-related education only if it maintains or improves skills required in your present work. 1040ez free online See Education To Maintain or Improve Skills , later. 1040ez free online Example. 1040ez free online You are a teacher who has satisfied the minimum requirements for teaching. 1040ez free online Your employer requires you to take an additional college course each year to keep your teaching job. 1040ez free online If the courses will not qualify you for a new trade or business, they are qualifying work-related education even if you eventually receive a master's degree and an increase in salary because of this extra education. 1040ez free online This image is too large to be displayed in the current screen. 1040ez free online Please click the link to view the image. 1040ez free online Figure 12-1 Education To Maintain or Improve Skills If your education is not required by your employer or the law, it can be qualifying work-related education only if it maintains or improves skills needed in your present work. 1040ez free online This could include refresher courses, courses on current developments, and academic or vocational courses. 1040ez free online Example. 1040ez free online You repair televisions, radios, and stereo systems for XYZ Store. 1040ez free online To keep up with the latest changes, you take special courses in radio and stereo service. 1040ez free online These courses maintain and improve skills required in your work. 1040ez free online Maintaining skills vs. 1040ez free online qualifying for new job. 1040ez free online   Education to maintain or improve skills needed in your present work is not qualifying education if it will also qualify you for a new trade or business. 1040ez free online Education during temporary absence. 1040ez free online   If you stop working for a year or less in order to get education to maintain or improve skills needed in your present work and then return to the same general type of work, your absence is considered temporary. 1040ez free online Education that you get during a temporary absence is qualifying work-related education if it maintains or improves skills needed in your present work. 1040ez free online Example. 1040ez free online You quit your biology research job to become a full-time biology graduate student for 1 year. 1040ez free online If you return to work in biology research after completing the courses, the education is related to your present work even if you do not go back to work with the same employer. 1040ez free online Education during indefinite absence. 1040ez free online   If you stop work for more than a year, your absence from your job is considered indefinite. 1040ez free online Education during an indefinite absence, even if it maintains or improves skills needed in the work from which you are absent, is considered to qualify you for a new trade or business. 1040ez free online Therefore, it is not qualifying work-related education. 1040ez free online Education To Meet Minimum Requirements Education you need to meet the minimum educational requirements for your present trade or business is not qualifying work-related education. 1040ez free online The minimum educational requirements are determined by: Laws and regulations, Standards of your profession, trade, or business, and Your employer. 1040ez free online Once you have met the minimum educational requirements that were in effect when you were hired, you do not have to meet any new minimum educational requirements. 1040ez free online This means that if the minimum requirements change after you were hired, any education you need to meet the new requirements can be qualifying education. 1040ez free online You have not necessarily met the minimum educational requirements of your trade or business simply because you are already doing the work. 1040ez free online Example 1. 1040ez free online You are a full-time engineering student. 1040ez free online Although you have not received your degree or certification, you work part time as an engineer for a firm that will employ you as a full-time engineer after you finish college. 1040ez free online Although your college engineering courses improve your skills in your present job, they are also needed to meet the minimum job requirements for a full-time engineer. 1040ez free online The education is not qualifying work-related education. 1040ez free online Example 2. 1040ez free online You are an accountant and you have met the minimum educational requirements of your employer. 1040ez free online Your employer later changes the minimum educational requirements and requires you to take college courses to keep your job. 1040ez free online These additional courses can be qualifying work-related education because you have already satisfied the minimum requirements that were in effect when you were hired. 1040ez free online Requirements for Teachers States or school districts usually set the minimum educational requirements for teachers. 1040ez free online The requirement is the college degree or the minimum number of college hours usually required of a person hired for that position. 1040ez free online If there are no requirements, you will have met the minimum educational requirements when you become a faculty member. 1040ez free online The determination of whether you are a faculty member of an educational institution must be made on the basis of the particular practices of the institution. 1040ez free online You generally will be considered a faculty member when one or more of the following occurs. 1040ez free online You have tenure. 1040ez free online Your years of service count toward obtaining tenure. 1040ez free online You have a vote in faculty decisions. 1040ez free online Your school makes contributions for you to a retirement plan other than social security or a similar program. 1040ez free online Example 1. 1040ez free online The law in your state requires beginning secondary school teachers to have a bachelor's degree, including 10 professional education courses. 1040ez free online In addition, to keep the job a teacher must complete a fifth year of training within 10 years from the date of hire. 1040ez free online If the employing school certifies to the state Department of Education that qualified teachers cannot be found, the school can hire persons with only 3 years of college. 1040ez free online However, to keep their jobs, these teachers must get a bachelor's degree and the required professional education courses within 3 years. 1040ez free online Under these facts, the bachelor's degree, whether or not it includes the 10 professional education courses, is considered the minimum educational requirement for qualification as a teacher in your state. 1040ez free online If you have all the required education except the fifth year, you have met the minimum educational requirements. 1040ez free online The fifth year of training is qualifying work-related education unless it is part of a program of study that will qualify you for a new trade or business. 1040ez free online Example 2. 1040ez free online Assume the same facts as in Example 1 except that you have a bachelor's degree and only six professional education courses. 1040ez free online The additional four education courses can be qualifying work-related education. 1040ez free online Although you do not have all the required courses, you have already met the minimum educational requirements. 1040ez free online Example 3. 1040ez free online Assume the same facts as in Example 1 except that you are hired with only 3 years of college. 1040ez free online The courses you take that lead to a bachelor's degree (including those in education) are not qualifying work-related education. 1040ez free online They are needed to meet the minimum educational requirements for employment as a teacher. 1040ez free online Example 4. 1040ez free online You have a bachelor's degree and you work as a temporary instructor at a university. 1040ez free online At the same time, you take graduate courses toward an advanced degree. 1040ez free online The rules of the university state that you can become a faculty member only if you get a graduate degree. 1040ez free online Also, you can keep your job as an instructor only as long as you show satisfactory progress toward getting this degree. 1040ez free online You have not met the minimum educational requirements to qualify you as a faculty member. 1040ez free online The graduate courses are not qualifying work-related education. 1040ez free online Certification in a new state. 1040ez free online   Once you have met the minimum educational requirements for teachers for your state, you are considered to have met the minimum educational requirements in all states. 1040ez free online This is true even if you must get additional education to be certified in another state. 1040ez free online Any additional education you need is qualifying work-related education. 1040ez free online You have already met the minimum requirements for teaching. 1040ez free online Teaching in another state is not a new trade or business. 1040ez free online Example. 1040ez free online You hold a permanent teaching certificate in State A and are employed as a teacher in that state for several years. 1040ez free online You move to State B and are promptly hired as a teacher. 1040ez free online You are required, however, to complete certain prescribed courses to get a permanent teaching certificate in State B. 1040ez free online These additional courses are qualifying work-related education because the teaching position in State B involves the same general kind of work for which you were qualified in State A. 1040ez free online Education That Qualifies You for a New Trade or Business Education that is part of a program of study that will qualify you for a new trade or business is not qualifying work-related education. 1040ez free online This is true even if you do not plan to enter that trade or business. 1040ez free online If you are an employee, a change of duties that involves the same general kind of work is not a new trade or business. 1040ez free online Example 1. 1040ez free online You are an accountant. 1040ez free online Your employer requires you to get a law degree at your own expense. 1040ez free online You register at a law school for the regular curriculum that leads to a law degree. 1040ez free online Even if you do not intend to become a lawyer, the education is not qualifying because the law degree will qualify you for a new trade or business. 1040ez free online Example 2. 1040ez free online You are a general practitioner of medicine. 1040ez free online You take a 2-week course to review developments in several specialized fields of medicine. 1040ez free online The course does not qualify you for a new profession. 1040ez free online It is qualifying work- related education because it maintains or improves skills required in your present profession. 1040ez free online Example 3. 1040ez free online While working in the private practice of psychiatry, you enter a program to study and train at an accredited psychoanalytic institute. 1040ez free online The program will lead to qualifying you to practice psychoanalysis. 1040ez free online The psychoanalytic training does not qualify you for a new profession. 1040ez free online It is qualifying work-related education because it maintains or improves skills required in your present profession. 1040ez free online Bar or CPA Review Course Review courses to prepare for the bar examination or the certified public accountant (CPA) examination are not qualifying work-related education. 1040ez free online They are part of a program of study that can qualify you for a new profession. 1040ez free online Teaching and Related Duties All teaching and related duties are considered the same general kind of work. 1040ez free online A change in duties in any of the following ways is not considered a change to a new business. 1040ez free online Elementary school teacher to secondary school teacher. 1040ez free online Teacher of one subject, such as biology, to teacher of another subject, such as art. 1040ez free online Classroom teacher to guidance counselor. 1040ez free online Classroom teacher to school administrator. 1040ez free online What Expenses Can Be Deducted If your education meets the requirements described earlier under Qualifying Work-Related Education you can generally deduct your education expenses as business expenses. 1040ez free online If you are not self-employed, you can deduct business expenses only if you itemize your deductions. 1040ez free online You cannot deduct expenses related to tax-exempt and excluded income. 1040ez free online Deductible expenses. 1040ez free online   The following education expenses can be deducted. 1040ez free online Tuition, books, supplies, lab fees, and similar items. 1040ez free online Certain transportation and travel costs. 1040ez free online Other education expenses, such as costs of research and typing when writing a paper as part of an educational program. 1040ez free online Nondeductible expenses. 1040ez free online   You cannot deduct personal or capital expenses. 1040ez free online For example, you cannot deduct the dollar value of vacation time or annual leave you take to attend classes. 1040ez free online This amount is a personal expense. 1040ez free online Unclaimed reimbursement. 1040ez free online   If you do not claim reimbursement that you are entitled to receive from your employer, you cannot deduct the expenses that apply to that unclaimed reimbursement. 1040ez free online Example. 1040ez free online Your employer agrees to pay your education expenses if you file a voucher showing your expenses. 1040ez free online You do not file a voucher and you do not get reimbursed. 1040ez free online Because you did not file a voucher, you cannot deduct the expenses on your tax return. 1040ez free online Transportation Expenses If your education qualifies, you can deduct local transportation costs of going directly from work to school. 1040ez free online If you are regularly employed and go to school on a temporary basis, you can also deduct the costs of returning from school to home. 1040ez free online Temporary basis. 1040ez free online   You go to school on a temporary basis if either of the following situations applies to you. 1040ez free online Your attendance at school is realistically expected to last 1 year or less and does indeed last for 1 year or less. 1040ez free online Initially, your attendance at school is realistically expected to last 1 year or less, but at a later date your attendance is reasonably expected to last more than 1 year. 1040ez free online Your attendance is temporary up to the date you determine it will last more than 1 year. 1040ez free online If you are in either situation (1) or (2) above, your attendance is not temporary if facts and circumstances indicate otherwise. 1040ez free online Attendance not on a temporary basis. 1040ez free online   You do not go to school on a temporary basis if either of the following situations apply to you. 1040ez free online Your attendance at school is realistically expected to last more than 1 year. 1040ez free online It does not matter how long you actually attend. 1040ez free online Initially, your attendance at school is realistically expected to last 1 year or less, but at a later date your attendance is reasonably expected to last more than 1 year. 1040ez free online Your attendance is not temporary after the date you determine it will last more than 1 year. 1040ez free online Deductible Transportation Expenses If you are regularly employed and go directly from home to school on a temporary basis, you can deduct the round-trip costs of transportation between your home and school. 1040ez free online This is true regardless of the location of the school, the distance traveled, or whether you attend school on nonwork days. 1040ez free online Transportation expenses include the actual costs of bus, subway, cab, or other fares, as well as the costs of using your car. 1040ez free online Transportation expenses do not include amounts spent for travel, meals, or lodging while you are away from home overnight. 1040ez free online Example 1. 1040ez free online You regularly work in a nearby town, and go directly from work to home. 1040ez free online You also attend school every work night for 3 months to take a course that improves your job skills. 1040ez free online Since you are attending school on a temporary basis, you can deduct your daily round-trip transportation expenses in going between home and school. 1040ez free online This is true regardless of the distance traveled. 1040ez free online Example 2. 1040ez free online Assume the same facts as in Example 1 except that on certain nights you go directly from work to school and then home. 1040ez free online You can deduct your transportation expenses from your regular work site to school and then home. 1040ez free online Example 3. 1040ez free online Assume the same facts as in Example 1 except that you attend the school for 9 months on Saturdays, nonwork days. 1040ez free online Since you are attending school on a temporary basis, you can deduct your round-trip transportation expenses in going between home and school. 1040ez free online Example 4. 1040ez free online Assume the same facts as in Example 1 except that you attend classes twice a week for 15 months. 1040ez free online Since your attendance in school is not considered temporary, you cannot deduct your transportation expenses in going between home and school. 1040ez free online If you go directly from work to school, you can deduct the one-way transportation expenses of going from work to school. 1040ez free online If you go from work to home to school and return home, your transportation expenses cannot be more than if you had gone directly from work to school. 1040ez free online Using your car. 1040ez free online    If you use your car (whether you own or lease it) for transportation to school, you can deduct your actual expenses or use the standard mileage rate to figure the amount you can deduct. 1040ez free online The standard mileage rate for miles driven from January 1, 2013 through December 31, 2013, is 56. 1040ez free online 5 cents per mile. 1040ez free online Whichever method you use, you can also deduct parking fees and tolls. 1040ez free online See Publication 463, chapter 4, for information on deducting your actual expenses of using a car. 1040ez free online Travel Expenses You can deduct expenses for travel, meals (see 50% limit on meals , later), and lodging if you travel overnight mainly to obtain qualifying work-related education. 1040ez free online Travel expenses for qualifying work-related education are treated the same as travel expenses for other employee business purposes. 1040ez free online For more information, see chapter 1 of Publication 463. 1040ez free online You cannot deduct expenses for personal activities such as sightseeing, visiting, or entertaining. 1040ez free online Mainly personal travel. 1040ez free online   If your travel away from home is mainly personal, you cannot deduct all of your expenses for travel, meals, and lodging. 1040ez free online You can deduct only your expenses for lodging and 50% of your expenses for meals during the time you attend the qualified educational activities. 1040ez free online   Whether a trip's purpose is mainly personal or educational depends upon the facts and circumstances. 1040ez free online An important factor is the comparison of time spent on personal activities with time spent on educational activities. 1040ez free online If you spend more time on personal activities, the trip is considered mainly educational only if you can show a substantial nonpersonal reason for traveling to a particular location. 1040ez free online Example 1. 1040ez free online John works in Newark, New Jersey. 1040ez free online He traveled to Chicago to take a deductible 1-week course at the request of his employer. 1040ez free online His main reason for going to Chicago was to take the course. 1040ez free online While there, he took a sightseeing trip, entertained some friends, and took a side trip to Pleasantville for a day. 1040ez free online Since the trip was mainly for business, John can deduct his round-trip airfare to Chicago. 1040ez free online He cannot deduct his transportation expenses of going to Pleasantville. 1040ez free online He can deduct only the meals (subject to the 50% limit) and lodging connected with his educational activities. 1040ez free online Example 2. 1040ez free online Sue works in Boston. 1040ez free online She went to a university in Michigan to take a course for work. 1040ez free online The course is qualifying work-related education. 1040ez free online She took one course, which is one-fourth of a full course load of study. 1040ez free online She spent the rest of the time on personal activities. 1040ez free online Her reasons for taking the course in Michigan were all personal. 1040ez free online Sue's trip is mainly personal because three-fourths of her time is considered personal time. 1040ez free online She cannot deduct the cost of her round-trip train ticket to Michigan. 1040ez free online She can deduct one-fourth of the meals (subject to the 50% limit) and lodging costs for the time she attended the university. 1040ez free online Example 3. 1040ez free online Dave works in Nashville and recently traveled to California to take a 2-week seminar. 1040ez free online The seminar is qualifying work-related education. 1040ez free online While there, he spent an extra 8 weeks on personal activities. 1040ez free online The facts, including the extra 8-week stay, show that his main purpose was to take a vacation. 1040ez free online Dave cannot deduct his round-trip airfare or his meals and lodging for the 8 weeks. 1040ez free online He can deduct only his expenses for meals (subject to the 50% limit) and lodging for the 2 weeks he attended the seminar. 1040ez free online Cruises and conventions. 1040ez free online   Certain cruises and conventions offer seminars or courses as part of their itinerary. 1040ez free online Even if the seminars or courses are work related, your deduction for travel may be limited. 1040ez free online This applies to: Travel by ocean liner, cruise ship, or other form of luxury water transportation, and Conventions outside the North American area. 1040ez free online   For a discussion of the limits on travel expense deductions that apply to cruises and conventions, see Luxury Water Travel and Conventions in chapter 1 of Publication 463. 1040ez free online 50% limit on meals. 1040ez free online   You can deduct only 50% of the cost of your meals while traveling away from home to obtain qualifying work-related education. 1040ez free online If you were reimbursed for the meals, see How To Treat Reimbursements , later. 1040ez free online   Employees must use Form 2106 or Form 2106-EZ to apply the 50% limit. 1040ez free online Travel as Education You cannot deduct the cost of travel as a form of education even if it is directly related to your duties in your work or business. 1040ez free online Example. 1040ez free online You are a French language teacher. 1040ez free online While on sabbatical leave granted for travel, you traveled through France to improve your knowledge of the French language. 1040ez free online You chose your itinerary and most of your activities to improve your French language skills. 1040ez free online You cannot deduct your travel expenses as education expenses. 1040ez free online This is true even if you spent most of your time learning French by visiting French schools and families, attending movies or plays, and engaging in similar activities. 1040ez free online No Double Benefit Allowed You cannot do either of the following. 1040ez free online Deduct work-related education expenses as business expenses if you benefit from these expenses under any other provision of the law, for example, as a tuition and fees deduction. 1040ez free online Deduct work-related education expenses paid with tax-free scholarship, grant, or employer-provided educational assistance. 1040ez free online See Adjustments to Qualifying Work-Related Education Expenses, next. 1040ez free online Adjustments to Qualifying Work-Related Education Expenses If you pay qualifying work-related education expenses with certain tax-free funds, you cannot claim a deduction for those amounts. 1040ez free online You must reduce the qualifying expenses by the amount of such expenses allocable to the tax-free educational assistance. 1040ez free online Tax-free educational assistance. 1040ez free online   This includes: The tax-free part of scholarships and fellowships (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions). 1040ez free online Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. 1040ez free online Amounts that do not reduce qualifying work-related education expenses. 1040ez free online   Do not reduce the qualifying work-related education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance, or A withdrawal from the student's personal savings. 1040ez free online Also, do not reduce the qualifying work-related education expenses by any scholarship or fellowship reported as income on the student's return or any scholarship which, by its terms, cannot be applied to qualifying work-related education expenses. 1040ez free online How To Treat Reimbursements How you treat reimbursements depends on the arrangement you have with your employer. 1040ez free online There are two basic types of reimbursement arrangements—accountable plans and nonaccountable plans. 1040ez free online You can tell the type of plan you are reimbursed under by the way the reimbursement is reported on your Form W-2. 1040ez free online Note. 1040ez free online The following rules about reimbursement arrangements also apply to expense allowances received from your employer. 1040ez free online Accountable Plans To be an accountable plan, your employer's reimbursement arrangement must require you to meet all three of the following rules. 1040ez free online Your expenses must have a business connection. 1040ez free online This means your expenses must be deductible under the rules for qualifying work-related education explained earlier. 1040ez free online You must adequately account to your employer for your expenses within a reasonable period of time. 1040ez free online You must return any reimbursement or allowance in excess of the expenses accounted for within a reasonable period of time. 1040ez free online If you are reimbursed under an accountable plan, your employer should not include any reimbursement in your income in box 1 of your Form W-2. 1040ez free online If your employer included reimbursements in box 1 of your Form W-2 and you meet all three rules for accountable plans, ask your employer for a corrected Form W-2. 1040ez free online Accountable plan rules not met. 1040ez free online   Even though you are reimbursed under an accountable plan, some of your expenses may not meet all three rules for accountable plans. 1040ez free online Those expenses that fail to meet the three rules are treated as having been reimbursed under a Nonaccountable Plan (discussed later). 1040ez free online Expenses equal reimbursement. 1040ez free online   Under an accountable plan, if your expenses equal your reimbursement, you do not complete Form 2106 or 2106-EZ. 1040ez free online Because your expenses and reimbursements are equal, you do not have a deduction. 1040ez free online Excess expenses. 1040ez free online   If your expenses are more than your reimbursement, you can deduct your excess expenses. 1040ez free online This is discussed later, under Deducting Business Expenses . 1040ez free online Allocating your reimbursements for meals. 1040ez free online   Because your excess meal expenses are subject to the 50% limit, you must figure them separately from your other expenses. 1040ez free online If your employer paid you a single amount to cover both meals and other expenses, you must allocate the reimbursement so that you can figure your excess meal expenses separately. 1040ez free online Make the allocation as follows. 1040ez free online Divide your meal expenses by your total expenses. 1040ez free online Multiply your total reimbursement by the result from (1). 1040ez free online This is the allocated reimbursement for your meal expenses. 1040ez free online Subtract the amount figured in (2) from your total reimbursement. 1040ez free online The difference is the allocated reimbursement for your other expenses of qualifying work-related education. 1040ez free online Example. 1040ez free online Your employer paid you an expense allowance of $2,000 under an accountable plan. 1040ez free online The allowance was to cover all of your expenses of traveling away from home to take a 2-week training course for work. 1040ez free online There was no indication of how much of the reimbursement was for each type of expense. 1040ez free online Your actual expenses equal $2,500 ($425 for meals + $700 lodging + $150 transportation expenses + $1,225 for books and tuition). 1040ez free online Using the steps listed above, allocate the reimbursement between the $425 meal expenses and the $2,075 other expenses. 1040ez free online   1. 1040ez free online $425 meal expenses  $2,500 total expenses = . 1040ez free online 17   2. 1040ez free online $2,000 (reimbursement)×. 1040ez free online 17     =$340 (allocated reimbursement for meal expenses)   3. 1040ez free online $2,000 (reimbursement)−$340 (meals)     = $1,660 (allocated reimbursement for other qualifying work-related education expenses) Your excess meal expenses are $85 ($425 − $340) and your excess other expenses are $415 ($2,075 − $1,660). 1040ez free online After you apply the 50% limit to your meals, you have a deduction for work-related education expenses of $458 (($85 × 50%) + $415). 1040ez free online Nonaccountable Plans Your employer will combine the amount of any reimbursement or other expense allowance paid to you under a nonaccountable plan with your wages, salary, or other pay and report the total in box 1 of your Form W-2. 1040ez free online You can deduct your expenses regardless of whether they are more than, less than, or equal to your reimbursement. 1040ez free online This is discussed later under Deducting Business Expenses . 1040ez free online An illustrated example of a nonaccountable plan, using Form 2106-EZ, is shown at the end of this chapter. 1040ez free online Reimbursements for nondeductible expenses. 1040ez free online   Reimbursements you received for nondeductible expenses are treated as paid under a nonaccountable plan. 1040ez free online You must include them in your income. 1040ez free online For example, you must include in your income reimbursements your employer gave you for expenses of education that: You need to meet the minimum educational requirements for your job, or Is part of a program of study that can qualify you for a new trade or business. 1040ez free online   For more information on accountable and nonaccountable plans, see chapter 6 of Publication 463. 1040ez free online Deducting Business Expenses Self-employed persons and employees report their business expenses differently. 1040ez free online The following information explains what forms you must use to deduct the cost of your qualifying work-related education as a business expense. 1040ez free online Self-Employed Persons If you are self-employed, you must report the cost of your qualifying work-related education on the appropriate form used to report your business income and expenses (generally Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Schedule F (Form 1040)). 1040ez free online If your education expenses include expenses for a car or truck, travel, or meals, report those expenses the same way you report other business expenses for those items. 1040ez free online See the instructions for the form you file for information on how to complete it. 1040ez free online Employees If you are an employee, you can deduct the cost of qualifying work-related education only if you: Did not receive (and were not entitled to receive) any reimbursement from your employer, Were reimbursed under a nonaccountable plan (amount is included in box 1 of Form W-2), or Received reimbursement under an accountable plan, but the amount received was less than your expenses for which you claimed reimbursement. 1040ez free online If either (1) or (2) applies, you can deduct the total qualifying cost. 1040ez free online If (3) applies, you can deduct only the qualifying costs that were more than your reimbursement. 1040ez free online In order to deduct the cost of your qualifying work-related education as a business expense, include the amount with your deduction for any other employee business expenses on Schedule A (Form 1040), line 21, or Schedule A (Form 1040NR), line 7. 1040ez free online (Special rules for expenses of certain performing artists and fee-basis officials and for impairment-related work expenses are explained later. 1040ez free online ) This deduction (except for impairment-related work expenses of disabled individuals) is subject to the 2%-of-adjusted-gross-income limit that applies to most miscellaneous itemized deductions. 1040ez free online Form 2106 or 2106-EZ. 1040ez free online   To figure your deduction for employee business expenses, including qualifying work-related education, you generally must complete Form 2106 or 2106-EZ. 1040ez free online Form not required. 1040ez free online   Do not complete either Form 2106 or 2106-EZ if: All reimbursements, if any, are included in box 1 of your Form W-2, and You are not claiming travel, transportation, meal, or entertainment expenses. 1040ez free online   If you meet both of these requirements, enter the expenses directly on Schedule A (Form 1040), line 21, or Schedule A (Form 1040NR), line 7. 1040ez free online (Special rules for expenses of certain Performing Artists and Fee-Basis Officials and for Impairment-Related Work Expenses are explained later. 1040ez free online ) Using Form 2106-EZ. 1040ez free online   This form is shorter and easier to use than Form 2106. 1040ez free online Generally, you can use this form if: All reimbursements, if any, are included in box 1 of your Form W-2, and You are using the standard mileage rate if you are claiming vehicle expenses. 1040ez free online   If you do not meet both of these requirements, use Form 2106. 1040ez free online Performing Artists and Fee-Basis Officials If you are a qualified performing artist, or a state (or local) government official who is paid in whole or in part on a fee basis, you can deduct the cost of your qualifying work-related education as an adjustment to gross income rather than as an itemized deduction. 1040ez free online Include the cost of your qualifying work-related education with any other employee business expenses on Form 1040, line 24, or Form 1040NR, line 35. 1040ez free online You do not have to itemize your deductions on Schedule A (Form 1040 or 1040NR), and, therefore, the deduction is not subject to the 2%-of-adjusted-gross-income limit. 1040ez free online You must complete Form 2106 or 2106-EZ to figure your deduction even if you meet the requirements described earlier under Form not required . 1040ez free online For more information on qualified performing artists, see chapter 6 of Publication 463. 1040ez free online Impairment-Related Work Expenses If you are disabled and have impairment-related work expenses that are necessary for you to be able to get qualifying work-related education, you can deduct these expenses on Schedule A (Form 1040), line 28, or Schedule A (Form 1040NR), line 14. 1040ez free online They are not subject to the 2%-of-adjusted-gross-income limit. 1040ez free online To deduct these expenses, you must complete Form 2106 or 2106-EZ even if you meet the requirements described earlier under Form not required . 1040ez free online For more information on impairment-related work expenses, see chapter 6 of Publication 463. 1040ez free online Recordkeeping You must keep records as proof of any deduction claimed on your tax return. 1040ez free online Generally, you should keep your records for 3 years from the date of filing the tax return and claiming the deduction. 1040ez free online If you are an employee who is reimbursed for expenses and you give your records and documentation to your employer, you do not have to keep duplicate copies of this information. 1040ez free online However, you should keep your records for a 3-year period if: You claim deductions for expenses that are more than your reimbursement, Your employer does not use adequate accounting procedures to verify expense accounts, You are related to your employer, or Your expenses are reimbursed under a nonaccountable plan. 1040ez free online Examples of records to keep. 1040ez free online   If any of the above cases apply to you, you must be able to prove that your expenses are deductible. 1040ez free online You should keep adequate records or have sufficient evidence that will support your expenses. 1040ez free online Estimates or approximations do not qualify as proof of an expense. 1040ez free online Some examples of what can be used to help prove your expenses are: Documents, such as transcripts, course descriptions, catalogs, etc. 1040ez free online , showing periods of enrollment in educational institutions, principal subjects studied, and descriptions of educational activity. 1040ez free online Canceled checks and receipts to verify amounts you spent for: Tuition and books, Meals and lodging while away from home overnight for educational purposes, Travel and transportation, and Other education expenses. 1040ez free online Statements from your employer explaining whether the education was necessary for you to keep your job, salary, or status; how the education helped maintain or improve skills needed in your job; how much reimbursement you received; and, if you are a teacher, the type of certificate and subjects taught. 1040ez free online Complete information about any scholarship or fellowship grants, including amounts you received during the year. 1040ez free online Illustrated Example Victor Jones teaches math at a private high school in North Carolina. 1040ez free online He was selected to attend a 3-week math seminar at a university in California. 1040ez free online The seminar will improve his skills in his current job and is qualifying work-related education. 1040ez free online He was reimbursed for his expenses under his employer's nonaccountable plan, so his reimbursement of $2,100 is included in the wages shown in box 1 of his Form W-2. 1040ez free online Victor will file Form 1040. 1040ez free online His actual expenses for the seminar are as follows:   Lodging   $1,050     Meals   526     Airfare   550     Taxi fares   50     Tuition and books   400     Total Expenses   $2,576   Victor files Form 2106-EZ with his tax return. 1040ez free online He shows his expenses for the seminar in Part I of the form. 1040ez free online He enters $1,650 ($1,050 + $550 + $50) on line 3 to account for his lodging, airfare, and taxi fares. 1040ez free online He enters $400 on line 4 for his tuition and books. 1040ez free online On the line provided for total meals and entertainment expenses, Victor enters $526 for meal expenses. 1040ez free online He multiplies that amount by 50% and enters the result, $263, on line 5. 1040ez free online On line 6, Victor totals the amounts from lines 3 through 5. 1040ez free online He carries the total, $2,313, to Schedule A (Form 1040), line 21. 1040ez free online Since he does not claim any vehicle expenses, Victor leaves Part II blank. 1040ez free online His filled-in form is shown on the next page. 1040ez free online This image is too large to be displayed in the current screen. 1040ez free online Please click the link to view the image. 1040ez free online Form 2106-EZ for V. 1040ez free online 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1040ez free online Index A Assistance (see Help) C Casualty and theft losses, Casualty and Theft Losses Clean-up costs, Demolition and Clean-up Costs Copy of tax return, request for, Request for copy of tax return. 1040ez free online Credits: Employee retention, Employee Retention Credit D Demolition costs, Demolition and Clean-up Costs Depreciation: Qualified recovery assistance property, Qualified recovery assistance property. 1040ez free online Special allowance, Special Depreciation Allowance Disaster area: May 4, 2007 storms and tornadoes, Kansas Disaster Area Distributions: Home purchase or construction, Repayment of Qualified Distributions for the Purchase or Construction of a Main Home Qualified recovery assistance, Qualified recovery assistance distribution. 1040ez free online Repayment of, Repayment of Qualified Recovery Assistance Distributions Taxation of, Taxation of Qualified Recovery Assistance Distributions E Eligible retirement plan, Eligible retirement plan. 1040ez free online Employee retention credit, Employee Retention Credit F Free tax services, How To Get Tax Help H Help: How to get, How To Get Tax Help Phone number, How To Get Tax Help Special IRS assistance, How To Get Tax Help Website, How To Get Tax Help I Involuntary conversion (see Replacement period for nonrecognition of gain) IRAs and other retirement plans, IRAs and Other Retirement Plans K Kansas disaster area, Kansas Disaster Area M More information (see Tax help) N Net operating losses, Net Operating Losses P Publications (see Tax help) Q Qualified recovery assistance distribution, Qualified recovery assistance distribution. 1040ez free online Qualified recovery assistance loss, Qualified recovery assistance loss. 1040ez free online R Replacement period for nonrecognition of gain, Replacement Period for Nonrecognition of Gain Retirement plan, eligible, Eligible retirement plan. 1040ez free online Retirement plans, IRAs and Other Retirement Plans S Section 179 deduction, Increased Section 179 Deduction Storms and tornadoes, Storms and Tornadoes T Tax help, How To Get Tax Help (see Help) Tax return: Request for copy, Request for copy of tax return. 1040ez free online Request for transcript, Request for transcript of tax return. 1040ez free online Taxpayer Advocate, Contacting your Taxpayer Advocate. 1040ez free online Theft losses, Casualty and Theft Losses Transcript of tax return, request for, Request for transcript of tax return. 1040ez free online TTY/TDD information, How To Get Tax Help Prev  Up     Home   More Online Publications