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Your company can deduct the cost of courses or seminars you or your employees attend to maintain professional or

Tax-free Scholarships for Disaster Victims

    In an IRS ruling, the agency pinpointed a way for private foundations to provide tax-free scholarships to families of employees victimized by disasters. The decision can be used as a blueprint for educational grants. (IRS Revenue Ruling 2003-32)
    Background: Private foundation grants for education purposes are generally tax-free to recipients if certain requirements are met. For example, a company providing scholarships to employees' children through a private foundation must make awards on an objective, nondiscriminatory basis. Otherwise, the grants may be characterized as disguised compensation payments.
    The IRS has specific guidelines for ensuring tax-free treatment. If grants are made directly company employees, the number of grants cannot exceed 10 percent of the number of eligible applicants. Similarly, if grants are made to children of employees, the number of grants cannot exceed 25 percent of the number of eligible applicants or 10 percent of the number of eligible children.
    However, a plan can still be nondiscriminatory if the "facts and circumstances" indicate the intent of the program is to educate recipients in their individual capacities, instead of compensating employees.
    In the IRS ruling, a private foundation provides scholarships to a specific company's employees, or children of employees, who were seriously injured or killed in a "qualified disaster." (This could include a terrorist attack, military action, presidentially declared disaster area, accident involving common carriers or other catastrophic events.) Since the purpose of the scholarships was to educate recipients in their individual capacities, the IRS said the awards were tax-free.

job-related skills. But the write-off isn't limited to tuition.

Here are some overlooked
deductible expenses:

Books, supplies and laboratory fees.

The cost of local transportation if you travel to the training site directly from your workplace. That's why it's a good idea to head to the office early in the morning on your training days, get a little work done, then drive to school. Have your company reimburse you for gasoline or mileage. The company then can deduct the cost.

The cost of out-of-town travel. In fact, the company can deduct the cost of your transportation to, say, a week-long seminar, even if you head out of town a few days early and spend a weekend on the beach before the course begins. Just make sure that the primary purpose for the travel is education, not pleasure.

The cost of education that is not related to the job -- for instance, another undergraduate degree -- up to $5,250. The write-off is limited for company owners, but you certainly can offer the program to your staff as a deductible perk.

Of course, business owners can always draw extra compensation from the company in order to pay their job-related education expenses, then deduct the cost on their personal returns.

However, these expenses are considered miscellaneous itemized deductions and they can be difficult to deduct because you probably don't have enough of them to realize any benefit. You can write off only the amount that exceeds 2 percent of your adjusted gross income. So in most cases, you're better off if the company pays the tab.