Update – the Republicans’ 2017 tax bill has eliminated deductions for unreimbursed employee expenses such as job-related coaching, making the following information invalid:
If your organization won’t pay for or reimburse you for leadership coaching, that cost may be deductible as an unreimbursed employee expense as found on line 21 of Schedule A of your Federal Income Tax Form 1040.
Examples of these deductions include “unreimbursed employee expenses — “job travel, union dues, job education, etc.” Other miscellaneous deductions included in this section of Schedule A are tax preparation fees and other expenses such as investment expenses, safe deposit box fees, etc. The requirements for utilizing this deduction are that:
- The leadership coaching is related to the work that you currently perform (as opposed to preparation for employment in another field)
- That you itemize your deductions, and
- That all of your miscellaneous and unreimbursed employee deductions exceed 2% of your adjusted gross income (e.g. $2000 if you make $100,000/year)
I relied on my tax preparer for this information and she recommended that anyone considering such a deduction would be wise to consult with their own tax preparer since individual tax situations vary considerably, and there can also be differences in the income tax regulations of different states.