I would need to purchase a laptop in order to participate in an online program, geared towards preparing me for a career in data analytics. The course would be through Coursera or a similar type learning platform. I would be unable to take the class without the purchase of a new laptop, as I would need specific hardware.
Is this deductable, or does it have to be through a university?
If the program is qualified, you may be able to apply the Lifetime Learning Credit. You would have to check with the program. It covers 20% of the expenses and is limited to $2,000 a year. It can be used to acquire job skills. But remember the 20% limit on expenses that can be claimed.
The American Opportunity Tax Credit is for the first four years of post-high school education in a university.
Both programs require the institution to issue a 1098-T.
To be eligible for the tuition credits or Tuition and Fees deduction (TFD), the course must be taken at "an eligible institution". The school should be able to tell you if it is an eligible educational institution. In general, an eligible educational institution is an accredited college, university, vocational school, or other postsecondary educational institution, including accredited, public, nonprofit, and proprietary (privately-owned, profit-making) postsecondary institutions. Additionally, in order to be an eligible educational institution, the school must be eligible to participate in a student aid program administered by the Department of Education. If they issue a 1098-T they are probably an eligible institution.
Enter your school at the link below, to see if it's on the dept. of education list.
You must be a half time (or more) degree or certificate candidate to qualify for the American Opportunity Credit (AOTC). The purchase of REQUIRED books & computers qualifies for the AOTC. Non degree course qualify for the Lifetime Learning Credit (LLC). Books & computers only qualify for the LLC if purchased from the school.
For more info, See
Expenses to train for a new job or career are never deductible as work expenses. (Expenses to maintain or improve your skills in a career you already have can be deductible work expenses if you are an independent contractor filing a schedule C.)
Education expenses may be deductible as education expenses, as long as the course is offered by an institution of higher education that is accredited by the US Dept of Education to participate in student aid programs and the school must issue a 1098-T for your tuition. If the school is accredited, there are 2 possible tax credits and deductions, the lifetime learning credit and the American opportunity credit.
- For either credit, the laptop must be specifically required by the school, not merely be helpful.
- For the AOTC, you must be enrolled at least half time in a program leading to a degree, and you can only claim the AOTC a maximum of 4 years.
- For the LLC, you don't have to be enrolled full time, but the laptop only qualifies if it was required and it was required that you purchase it from the school.
If the purpose of you attending this school is to qualify for a new/different career, then nothing is deductible.
If the purpose is to maintain or improve your skills in your current line of work, then things "might" be deductible. See https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/eligible-educational-ins... and check out the links on that page to see if your school is listed with the U.S. Department of Education as a qualified school. If not a qualified school (which can include trade schools) then you just flat out don't qualify for any of the education credits.
Poster's original question was: "Can I deduct a laptop for an online program?"
The word "deduct" can be taken to mean 2 different things, in taxes: 1. can I literally get a deduction and/or 2. Is it eligible for an education tax break (tuition credits or TFD*).
Before 2018, educational courses related to your job were deductible as job expenses. The job expenses deduction is no longer allowed, except for self employed individuals. Then, the purpose must be to maintain or improve your skills for your current line of work, not learn a new job.
*An alternative to the Tuition credits (American Opportunity Credit [AOC] and Lifetime Learning Credit [LLC]) is the Tuition and Fees Deduction (TFD). To qualify for the tuition credits (or TFD), it is not necessary for the course work to be related to you current job. The TFD is technically an "adjustment to income" and not to be confused with the job related deduction. The TFD is less generous than the AOC and LLC, so, it is usually not a consideration.