Training for a new career is not a deductible business expense.
Why it is not deductible
Education that qualifies you for a new trade or business is not deductible, and that rule is not softened by how plainly useful the course is or by the fact that you paid for it out of business money. A coding bootcamp taken by a bookkeeper who wants to become a developer, or a first real estate licensing course taken by a landscaper, both fail the test. The reason is that the cost buys entry to an occupation rather than maintaining the one you are in, so it is treated as personal. Nothing goes on Schedule C and nothing goes in Part V.
Log it once, with the line already on it. Type an expense in plain words in ClaryBook and it is filed with a date, vendor, amount and what it was for, so the number your preparer needs for training for a new career is already written down.
Start for freeWhat training for a new career is confused with
- Line 27a, other expenses
- The same course is deductible on line 27a if you are already carrying on that trade and the course maintains or improves the skills it needs, so the question is always what trade you are already in.
- Schedule A, schedule a, personal itemised deduction
- Moving a personal education cost to Schedule A does not help either, since the work-expense category it would sit in is a miscellaneous itemised deduction that is not currently allowed.
Examples people try to deduct here
- $12,000 coding bootcamp taken by a working bookkeeper who wants to become a developer
- $450 pre-licensing real estate course taken before you have a licence
- $3,200 first-time CDL school for someone who has never driven commercially
- $1,900 bar review course for a law graduate
- $890 phlebotomy certificate course taken by a bookkeeper
What does not belong here
- Do not itemise it in Part V as training, which is the usual way this gets claimed by mistake.
- Do not split it, since there is no partial deduction for the portion that overlaps your current work.
- Do not treat it as a start-up cost of the new business unless and until that business actually starts, and then only under the start-up rules.
- Do not run it through line 14 as an educational assistance programme, which is only for employees other than yourself.
The limit that applies
If the new business does start, costs incurred before it began operating may fall under the start-up cost rules instead of being lost, so the date the business began matters more than the date you paid.
What to keep
If you believe the course maintains skills in a trade you already carry on, keep the syllabus and evidence that you were already working in that trade, such as invoices for the same kind of work before the course. Without that evidence the deduction has no foundation.
Other things that are not deductible
| Expense | Line |
|---|---|
| a business suit | Not deductible |
| a government fine or penalty | Not deductible |
| a parking ticket | Not deductible |
| a personal expense on the business card | Not deductible |
| a spouse's airfare on your business trip | Not deductible |
| a traffic ticket | Not deductible |
| an unpaid invoice | Not deductible |
| commuting mileage | Not deductible |
| country club dues | Not deductible |
| estimated tax payments | Not deductible |
| federal income tax | Not deductible |
| groceries for your home | Not deductible |
Related lookups
Sources
This page explains how Schedule C lines work. It is general information, not tax advice for your situation. If an expense is large or the answer turns on a fact about your business, confirm it with your tax preparer.
Looking for a different expense? The full Schedule C line lookup has every line from 8 to 27 with the expenses that belong on each, and Schedule C expense categories walks the whole form in order.
Log it once, with the line already on it. Type an expense in plain words in ClaryBook and it is filed with a date, vendor, amount and what it was for, so the number your preparer needs for training for a new career is already written down.
Start for free