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Deducting Business Education: What to Invest In & How to Deduct It

Did you know you can deduct educational expenses from your business taxes? Yep, those business books and courses are tax deductible (with a few exceptions, of course). Here’s what business education you can deduct from your taxes and how to make smart educational investments.


How Investing In Education Can Help You Scale Your Business


When I first started my business, I invested in so much education. Courses, books, coaching, you name it–if I had even a sliver of hope that it could help me scale my business, I clicked “add to cart.”



Looking back, not all of those resources panned out. But the ones that did have helped me create a team, scale my business, and feel more confident in my role as CEO. Here’s how investing in your education can do the same for you.


It helps you learn the basics.


I’m a huge proponent for learning as you go, but that can be intimidating when you’re first starting out. Investing in a beginners’ program at the start can help you learn the absolute basics, like registering your business, paying yourself, and finding clients.


It gives you a community.


The online business world is huge, but it can be incredibly lonely. Many programs and courses involve a group element where you can meet and grow alongside fellow business owners. The friends I made in my first few programs have become the foundation of my online community, and I don’t think I would have made it this far without them!


It teaches you what not to do.


Not every program is going to work out. But even the ones that don’t stick can teach you about yourself and your work. You’ll learn how others run their businesses, what kinds of mistakes they’ve made along the way, and what just doesn’t feel right to you. Part of honing in on your ideal business is figuring out what you don’t want. Every new experience is a learning opportunity!


What Kinds of Education Can Business Owners Deduct?


According to the IRS, self-employed business owners can deduct any form of business education that either…


  1. Maintains or improves skills needed in your present work or

  2. A law requires to keep your present salary, status or job


The exceptions are programs that help you enter a new field (say a course on hairdressing if you’re currently a mechanic) or that help you meet the minimum requirements for your current field (like the course you have to take to become a hairdresser in the first place).


For most business owners, educational deductions fall into one of two categories:


  • Courses and programs, like online classes, group coaching programs, and bonus certifications.

  • Books, magazines, and other materials that keep you up-to-date on industry trends or help you improve your craft.


If you’re not sure if your investment is deductible, check out this handy tool from the IRS.


How to Choose Worthwhile Education Investments


Just because you can deduct education doesn’t mean you should rush out and buy every course you see. Before you invest, ask yourself these questions:


“Do I have time for this?”


If you’re currently buried in client work, chances are you won’t find the time to complete an online course. Instead, work on automating your workflows and building a team, which will create more time for education and pursuing new ideas.⁠


“Will it pay for itself, and when?”


Most online business courses promise to make you more money than you spent on them. But how often is that true? It’s hard to say, but before you invest, sit down and calculate how many new clients it would take to pay off the course and how long it would take you to convert those new clients. That’ll help you make a smarter spending decision.⁠


“Is it aligned with my values and goals?”


Look, there’s no one way to run a business. Even if a course promises it can make you a millionaire, it’ll never work if it doesn't feel aligned with who you are and how you want to run your business. There are so many resources out there, and I guarantee there are plenty that feel good to you, so don’t settle.⁠


Do it yourself, but don’t do it alone.


Even the most DIY-savvy business owner needs support from time to time. That’s why we’ve created The CASH Club, a community for entrepreneurs who want to DIY their financial management without going in blind. (PS: You can deduct this!) Click here to learn more and join today.


 

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