Q. Is paying for a master’s degree tax deductible ?
A. Simple answer: Yes.
But taxes aren't simple. There are two alternative education tax breaks available : the Tuition and Fees Deduction (TFD) and the Lifetime Learning Credit (LLC). A third and more generous benefit, The American Opportunity Credit, is not available to grad students.
The TFD is technically an adjustment to income ("above the line deduction"). That is, you may claim it, even if you use the standard deduction (you do not have to itemize deductions). It is limited to a $4000 deduction.
https://www.savingforcollege.com/article/tuition-and-fees-deduction
The LLC is a nonrefundable tax credit equal to 20% of your qualified expenses, up to $10, 000 ($2000 max LLC). Usually the LLC is better than the TFD. https://www.savingforcollege.com/article/lifetime-learning-tax-credit . A tax credit directly reduces your calculated tax liability and is not just a deduction from income.
Prior to 2018, education costs were deductible as a job expense, if related to your work, but only as an itemized deduction, subject to the 2% of AGI rule. W-2 employees may no longer deduct job expenses. The self employed may still deduct business related education, directly on Schedule C.
