Can a Book be Tax Deductible?

Anna R. writes:

“I’m enjoying your book, Money Girl’s Smart Moves to Grow Rich. If I start investing in an IRA, is the cost of your book or any other learning program deductible on my taxes?”

That sounds like a great idea, Anna! But unfortunately, books or educational materials you purchase for personal use aren’t tax deductible.

However, here are 3 situations when a book would be considered a tax deduction:

1. Business expense: If you’re self-employed, expenses like books, magazines, and educational programs that are helpful in running your business are tax deductible—as long as you’re trying to make a profit. Learn more in my episode From Employee to Self Employed.
2. Job-related expense: A certain amount of unreimbursed expenses for your job that are necessary or helpful—such as a book, trade publication, or seminar—are deductible if you itemize expenses on Schedule A. Learn much more in Deduction Dangers, Part 2: Job Expenses.
3. Education expense: Tuition and fees you pay for yourself, your spouse, or a dependent to attend a qualified institution of higher education are deductible up to an annual limit—even if you don’t have enough total deductions to itemize. The deduction includes course-related books, supplies, and equipment that are required as a condition of enrollment. Learn more in Tips on How to Pay for College.

Anna, if none of these situations apply to you—don’t worry! Here’s how contributing to an IRA will be its own tax reward:

• Traditional IRA contributions give you an upfront tax deduction in the year you make them and aren’t taxed until you begin taking withdrawals after age 59½.
• Roth IRA contributions are taxable in the year you make them, but give you tax-free growth. Withdrawals made after age 59½ are completely tax-free.

In addition to these major tax breaks, making IRA contributions will allow you to build an investment account to pay for the happy retirement of your dreams.

Click here for more information to grab your copy of Money Girl’s Smart Moves to Grow Rich! This award-winning book is available as an ebook or paperback at your favorite book retailer.