Education expenses. You can deduct the ordinary and necessary expenses you pay for the education and training of your employees. For more information, see Education Expenses in chapter 2.

You can also deduct your expenses that are related to your own education expenses that are related to your trade or business, along with certain related travel. You must be able to show the education maintains or improves skills required in your trade or business, or it is required by law or regulations for keeping your pay, status, or job.

You cannot deduct education expenses you incur to meet the minimum requirements of your present trade or business, or those that qualify you for a new trade or business. This is true even if the education maintains or improves skills presently required in your business.

Example 1. Dr. Carter, who is a psychiatrist, begins a program of study at an accredited psychoanalytic institute to qualify as a psychoanalyst. She can deduct the cost of the program because the study maintains or improves skills required in her profession and does not qualify her for a new one.

Example 2. Herb Jones owns a repair shop for electronic equipment. The bulk of the business is television repairs, but occasionally he fixes tape decks and disc players. To keep up with the latest technical changes, he takes a special course to learn how to repair disc players. Since the course maintains and improves skills required in his trade, he can deduct its cost.

Example 3. Peter Green, an architect in New York, decided to take a special 2-week course in Los Angeles on the latest building techniques. While there, he spent an extra 8 weeks on personal activities. The time he spent on personal activities indicates his main reason for going to Los Angeles was to take a vacation. He can deduct his education expenses and meals and lodging for the 2 weeks he attended the course. He cannot deduct his round trip transportation expense to Los Angeles or any of the expenses for the 8 weeks spent on personal activities.