I just got a new teaching job and part of it involves IT on the schools computers. If I go back to school to take classes (working towards a degree) involving network management, would it be deductible as a work expense or is there something else I should be looking at?
I know there are deductions for generally going to school but I don’t think the IRS allows it as a work expense eg my Ed.D in math ed to teach math. Since this one would be focused on aquiring skills to do my job, would the IRS look at it differently?
You receive a 1099, which means that a) no taxes are generally taken out, and b) your employer is likely a cheapskate who doesn’t want to pay your FICA. You can deduct all reasonable expenses. You have to pay self-employment tax (both halves of FICA).
You get a W-2. You can only claim expenses if you a) itemize your return, and thus file Schedule A, and b) your work expenses are greater than 2% of your income. The worksheets will figure out what number that is. You file this towards the bottom of schedule A, line 21 and form 2106.
There are other situations. Sometimes education for job improvement is treated specially. Without knowing your situation you can probably deduct at least some of this - not all things might be covered. See 2106 instructions and Pub. 970 (both pdfs). Check to make sure that you can’t do the likely more beneficial education expenses (lifetime learning credit or the straight deduction, depending).
From the Pub, work eduction is:
[ul]
[li]It is required for you to keep your present salary, sta-[/li]tus, or job,
[li]The requirement serves a bona fide business purpose[/li]of your employer, and
[li]The education is not part of a program that will qualify[/li]you for a new trade or business.
[/ul]
Sounds like the last two apply, at least.
Work-related educational expenses (as eligible for form 2106) need to be focused on maintaining or improving skills you already use in your current position, rather than on training that qualifies you for a new position or that are new skills. Since your job is a hybrid of teaching and IT, it’s hard to give a clear yes or no. You’d want to look at how much time is spent in each role, which one has advancement opportunities, how much the employer depends on your skills, etc. Let’s call it a strong maybe.
The other education credits may provide you more benefit, though, assuming your overall income is low enough to claim them.
As tlh notes, it depends if these skills are optional. If you’re audited you would need your employer to certify that it was a required unreimbursed business expense. So ask them.
Is it part of your job title or responsibilities, I’d ask? E.g. you don’t volunteer to do it because you have free time and nobody else knows how? Again, it sounds like it.
If you are K-12 you can deduct up to $250 for materials straight onto the 1040. I believe this would not include stuff used for the classroom.
Clarification on the OP: you don’t have an EdD currentlt, right, but interested for the future?
Something else to consider is whether you even need to worry about whether the expenses would qualify as eligible business expenses to take as an itemized deduction on Sch A as Miscellaneous deductions subject to the 2% of AGI floor.
Qualified higher education expenses are eligible for either a credit or a page 1 of Form 1040 adjustment as long as your Adjusted Gross Income is below certain limits. I assume you have already attended 4 years of undergraduate study previously, so the credit you may he eligible for is the Lifetime Learning Credit. The calculation of this credit takes 20% of your qualified higher education expenses (tuition, books, supplies, etc) up to a maximum of $10,000 per year which would result in a 2,000 credit. The eligibility for this credit in 2013 is for single taxpayers with AGI of below 63,000 (starts to phase out at 53,000) or married filing joint taxpayers below 127,000 (starts to phase out at 107,000).
If your income is above these limits, there is also the Tuition and Fees deduction. This allows taxpayers to take up to 4,000 of qualified higher education expenses as a direct reduction to AGI. Single taxpayers in 2013 with AGI below 80,000 (starts to phase out at 65,000) or MFJ taxpayers with AGI below 160,000 (starts to phase out at 130,000) are eligible.
The expenses you use to calculate either of these tax benefits cannot be also used as expenses on Sch A as job related education expenses.
Usually the credit or T&D deduction are of more benefit than as a miscellaneous deduction subject to the 2% floor on Sch A unless the amount of education expenses are very high or someone’s income is too high to take the credit or adjustment.