Education & work-related expenses

Generally, you cannot deduct job-related education expenses as an itemized deduction. Certain exceptions apply. See Tax Topic 513, Work-Related Education Expenses. To determine if you qualify for any education credits for the work-related educational expenses you incur, refer to Publication 970, Tax Benefits for Education and Am I Eligible to Claim an Education Credit?

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My employer paid me additional compensation to cover my graduate school tuition and included it on my W-2 as wages. The program improves skills needed in my current field of employment but doesn't qualify me for a new trade or business. Can I claim this educational expense on my tax return and, if so, where do I claim the expense?

Answer:

Because you received the additional compensation as wages, you're treated as paying the tuition yourself out-of-pocket. To determine if you can claim the educational expense, and, if so, where to claim it on your return, review the rules for the lifetime learning credit.

Also review your eligibility for taking the expense as an adjustment to income for a qualified performing artist and/or fee-basis official on your tax return. See the Instructions for Form 1040 (and Form 1040-SR) or Instructions for Form 1040-NR. You may need to attach Form 2106, Employee Business Expenses.

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Last year, my parents and I both took out student loans to pay for my education. We both received Form 1098-E for our separate loans. I wasn't their dependent last year. Can we both claim student loan interest on our tax returns?

Answer:

No. Your parents cannot claim the deduction for student loan interest on their tax return because you were not their dependent at the time they took out a student loan for you. However, you can claim, subject to certain limitations, the deduction with respect to the loan that you took out for yourself (assuming that you meet the other requirements for this deduction).

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