Does education for a new license count as "improving skills" or "new business?

[wnell]

I am a working artist. Art was my side gig for many years (paintings, murals, merchandise, etc.). In 2021, I started the transition to work as an artist full-time. Many of my customers wanted my art as a tattoo. In July I went to school to become a licensed tattoo artist, to add that line to my art business. Can I deduct my tattoo-school tuition? I am confused as to whether this counts as "improving skills" (deductible) or "minimum requirements for a new business" (not deductible). For me, it's just another canvas for the art I've been selling all along. Help! Thank you.

[AnnetteB6 · Accepted solution]

If you intend to continue to pursue your work as an artist in your previous formats as well as being a tattoo artist, then the expenses you incurred would be a business expense reported on your Schedule C because it is improving your skills for your current business.

If you intend to start a second business focused only on work as a tattoo artist, then that could be considered as education to qualify you for a new trade or business.  

The bottom line is that it could fall either way.  Choose the option that makes the most sense to you and your business situation.  In the unlikely event that the IRS ever questions it, be prepared to explain your reasoning behind the way you report the expense.