Is Training a Tax-Deductible Business Expense?

Training is a tax-deductible business expense if you’re self-employed and the education relates to the work you already do. Sole proprietors, single-member LLC owners, freelancers, and other independent workers can write off qualifying training costs under Internal Revenue Code Section 162, which lowers both income tax and self-employment tax. W-2 employees generally cannot take this deduction on their personal returns in 2026, because the Tax Cuts and Jobs Act suspended unreimbursed employee business expense deductions and the One Big Beautiful Bill Act made that change permanent.¹

The Ordinary and Necessary Standard

Section 162 lets a business deduct any expense that is ordinary (common and accepted in your field) and necessary (helpful and appropriate for your work).² “Necessary” doesn’t mean you couldn’t run the business without it. If the training helps, that clears the bar. The IRS regulation adds that the expense must be “directly connected with or pertaining to the taxpayer’s trade or business.”³

A software developer paying for a coding workshop, a bookkeeper taking a class on new tax rules, or a contractor learning updated building codes fits comfortably inside this rule. The training is normal in that industry and clearly supports the work already being done. The harder cases are training that sits between professional development and something else, and for those the IRS uses two specific tests.

The Two Tests Your Training Must Pass

IRS Publication 970 sets out two tests for work-related education. Training only has to pass one.⁴

The skills test. The education maintains or improves skills you use in your current work. Refresher courses, updates on recent developments in your field, and classes that sharpen abilities you already apply on the job all qualify.
The requirement test. The education is required by law, regulation, or an employer for you to keep your current salary, status, or job. Continuing education hours that licensed professionals need to keep their credentials active fit here.

A CPA sitting through a seminar on new federal tax rules passes the skills test. A licensed physical therapist finishing biennial license renewal courses passes the requirement test. In either case, the tuition, books, and related costs are deductible.

Training That Doesn’t Qualify

Two categories of education never count as a business deduction, even when they’re clearly professional.

Education you need to meet the minimum requirements of your current trade or business is out. If your profession requires a specific degree or license as a baseline to enter the field, the cost of getting that credential is personal, not business. You’re paying to get in, not to improve at work you’re already doing.⁴

Training that qualifies you for a new trade or business is also excluded. Publication 970 uses a blunt example: an accountant whose employer requires them to earn a law degree cannot deduct the cost, even if they never plan to practice law. The degree opens a new profession, and that’s enough to kill the deduction regardless of how the accountant intends to use what they learned. Good intentions don’t rescue the write-off. If the program leads somewhere new, the deduction is gone.

W-2 Employees in 2026

If you receive a W-2, you cannot deduct your own work-related training on your personal return for tax year 2026. The Tax Cuts and Jobs Act suspended miscellaneous itemized deductions, which included unreimbursed employee business expenses, from 2018 through 2025. The One Big Beautiful Bill Act made that suspension permanent, so the write-off most employees once used for training no longer exists.¹

A few narrow groups still have access:

Armed Forces reservists, qualified performing artists, and fee-basis state or local government officials can still deduct work-related education using Form 2106, reported on Schedule 1 of Form 1040.¹
K-12 educators can deduct up to $300 in qualified expenses per year, including professional development tied to their curriculum. This one is above the line, so no itemizing required.⁵

For everyone else on a W-2, the practical route is having your employer pay. Reimbursements under an accountable plan are tax-free to you and deductible to the company. A Section 127 educational assistance program lets an employer pay up to $5,250 per year toward your education without adding it to your taxable wages.⁶

What Costs You Can Write Off

The deduction covers more than tuition. Publication 970 lists these categories:⁴

Tuition and fees paid to the school or provider.
Books, supplies, and lab fees required for the course.
Transportation to and from classes, using either actual expenses or the standard mileage rate.
Travel costs (airfare, lodging, and related expenses) when the training takes you away from home overnight.
Meals while traveling, deductible at 50% of the actual cost. The 50% cap still applies if you use the per diem rate.⁷
Research costs, typing services for papers, and similar expenses tied directly to the coursework.

The meal limit is the only percentage cap. Tuition, books, lodging, and transportation come off in full, assuming the training meets the ordinary-and-necessary standard and passes one of the two tests.

Where to Report It

Sole proprietors and single-member LLC owners put training costs on Schedule C (Form 1040). Education expenses go in Part V (Other Expenses) at Line 48, and the total carries to Line 27b.⁸ That reduces your net profit on Line 31, which cuts both your income tax and the self-employment tax figured on Schedule SE. Filers using Form 1040-SR follow the same lines. Self-employed farmers use Schedule F.¹

One boundary worth flagging: you can’t take the Section 162 business deduction and the Lifetime Learning Credit on the same dollar of expense. You can split different expenses between the two, but no double-dipping on a single cost.⁴

Records to Keep

Every deduction needs backup. For training, that means tuition receipts, course descriptions that show the connection to your current work, and proof of payment such as bank or credit card statements.⁹ Books and supplies need original invoices. Travel needs a log with dates, destinations, and business purpose. Transportation needs either a mileage log or receipts. Meal receipts should show amount, date, and location.

Keep these records for at least three years from the date you filed the return (or the due date, whichever is later), which matches the general audit window.¹⁰ If the IRS disallows a deduction and you can’t substantiate it, an accuracy-related penalty of 20% can apply to the resulting underpayment when it comes from negligence or a substantial understatement.¹¹ A single folder per training event, holding the receipt, the course description, and any travel notes, is usually enough to make the whole thing defensible.

1
Internal Revenue Service. Topic No. 513, Work-Related Education Expenses
2
Office of the Law Revision Counsel. 26 USC 162 – Trade or Business Expenses
3
eCFR. 26 CFR 1.162-1 – Business Expenses
4
Internal Revenue Service. Publication 970 (2025), Tax Benefits for Education
5
Internal Revenue Service. Topic No. 458, Educator Expense Deduction
6
Office of the Law Revision Counsel. 26 USC 127 – Educational Assistance Programs
7
Office of the Law Revision Counsel. 26 USC 274 – Disallowance of Certain Entertainment, Etc., Expenses
8
Internal Revenue Service. Instructions for Schedule C (Form 1040) (2025)
9
Internal Revenue Service. What Kind of Records Should I Keep
10
Internal Revenue Service. How Long Should I Keep Records
11
Office of the Law Revision Counsel. 26 USC 6662 – Imposition of Accuracy-Related Penalty on Underpayments