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Columns by June Walker: IPs Face Unique Tax Challenges Tax Deductions Are There For The Taking You Say You're Self-Employed -- Will the IRS? Criteria for Self-Employment Do You Have a Business or a Hobby? Proving That You're a Business Keeping Records -- It's Not Just for Taxes Three Ways to Expand Your Business Deductions Can I Deduct Disneyland and Other Questions Mixing Business with Pleasure and Other Gray Areas Quicken for IPs Courses That Qualify Training You Can't Deduct Getting There is Half the Battle Taking Deductions on the Road Getting Credit and Taking Allowances Advertising: Do It, Then Deduct It The Subtle Art of Advertising Deductions Billy Bridesnapper's Start-up Saga Starting Up and Shutting Down Start-Up Wrap-Up Giving Gifts, Taking Deductions

Getting There is Half the Battle In previous columns we looked at how to determine whether a course, convention, workshop, or seminar qualifies as business education. Now, assuming that it does qualify, we move on to the next question: Which of the costs related to the education are deductible as business expenses? We know that the fellow who owns and operates the Got That Swing Dance School can deduct the cost of that tap dance course he took; but can he deduct his tap shoes? The IRS says that if the education qualifies as a deduction, then the following educational expenses are generally deductible as business expenses as well: Tuition, books, supplies, lab fees, and similar items Transportation costs Travel costs Other educational expenses, such as costs of research and typing when writing a paper as part of an educational program Tuition, books, and supplies are an easy matter. Tap shoes are supplies. However, expenses for transportation and travel can be tricky. Transportation costs include the actual costs of: Bus, subway, cab, or other fares Use of your own car Transportation expenses do not include amounts spent for travel, meals, or lodging while you are away from home overnight. Those are travel expenses and I’ll explain them in the next column. As an independent professional, as long as your education qualifies as business education, you can deduct the local transportation costs of going directly from your place of business to school. If your education is on a temporary basis, you can deduct the round-trip costs of transportation -- that is, from your home or place of business to school, and then back. You may take the entire round-trip cost regardless of the location of the school, distance traveled, or whether you attend on work or non-work days. Education on a temporary basis means periodic short-term attendance, generally a matter of days or weeks. Attending classes twice a week for a year is not considered temporary. This round-trip rule applies to "employees who are regularly employed." As a self-employed person, you need to adapt that criterion to your business. If you have a full-time W-2 job and run your pet grooming service on weekends only, then you are not "regularly employed" and you cannot deduct the round-trip costs of attending the one-week course on poodle-cutting. But you can still deduct the cost of one-way transportation to class. Let’s say that your pet-grooming service is your full-time occupation and that you go directly home from your shop every evening. If you attend poodle-cutting class nightly for three weeks you can deduct your daily round-trip transportation expenses between home and school. If on some nights, or every night, you go directly from your shop to school and then home, you can deduct your transportation expenses from the shop to school and then home. If the course were given on six consecutive Mondays, a day that your shop is closed, you can still deduct your round-trip transportation expenses in going between home and class. If you attend class regularly rather than on a temporary basis then the IRS will not let you deduct your round-trip transportation expenses between home or shop and school. However, you can deduct one-way transportation expenses from your shop to school. If you return home after work and then go to school, your transportation expenses cannot be more than if you had gone directly from your place of business to school. Using Your Car or Truck The same rules apply if you drive your car to class. Be sure to see my future column on business use of your auto. Remember, the difference between transportation and travel is that travel is overnight. (c) 2000 June Walker. All rights reserved. We'd love to hear your feedback about this column, or put you in touch with June Walker if you like. You may also like to see her biography.