Can I claim udemy.com online courses as Work-related Deductions or Education Credits on US Federal taxes?

Wait so even if the classes directly relate to his current job, there's no way to deduct them at all as an employee? That seems unfair compared to self-employed people. What if he started a small side business related to his skills, would they be deductible then?

You're right that it creates an imbalance between employees and self-employed individuals. The 2017 tax law changes eliminated many employee deductions while preserving them for business owners. Starting a legitimate side business could potentially make the expenses deductible, but be very careful here. The business must be genuine with a profit motive, not just created for tax purposes. The IRS looks closely at Schedule C deductions, especially in the first few years. The courses would need to directly relate to that specific business, and you'd need to show actual business activity - marketing efforts, clients, income (even if small to start). Simply claiming a business exists without substantive activity could trigger audit concerns.

Does this actually work for regular W-2 employees too or only if you have a business? I've got a bunch of courses from LinkedIn Learning that my company didn't reimburse.

I'm always skeptical of these tax tools that claim to do something special. How is this different from just using TurboTax? Couldn't they tell you the same thing about education expenses?

For W-2 employees, it helps clarify what expenses might qualify for any employer reimbursement programs and which ones definitely won't qualify for tax deductions under current tax law. It can help you build a case to present to your employer for reimbursement by showing the business relevance. The difference from TurboTax is that it specifically analyzes education and professional development expenses across different tax situations. TurboTax asks general questions, but doesn't always explain WHY something doesn't qualify or give alternatives. When I uploaded my receipts, taxr.ai identified specific IRS regulations that applied to my situation and suggested multiple ways to approach the expense based on my personal circumstances.

How does this actually work? Does it somehow jump you ahead in the IRS phone queue? That seems too good to be true with how notoriously impossible it is to reach them.

I'm sorry, but this sounds like a scam. The IRS doesn't let third parties "jump the line" - there's a specific queue system. Why would anyone pay for something like this when you can just keep calling the IRS yourself? I've gotten through eventually by calling right when they open.

It doesn't jump ahead in the queue - that would be impossible. What it does is automate the calling process with technology that navigates the IRS phone tree and waits on hold for you. When an agent finally answers, you get an alert to join the call. So instead of being stuck listening to hold music for hours, you can go about your day and only connect when there's actually someone available to talk. I was skeptical too, but after spending multiple days trying to get through using the "call right when they open" approach without success, I was desperate. The service called repeatedly using optimal timing strategies based on their data about IRS answer patterns. For me it took about 17 minutes of their system waiting on hold, but I've heard sometimes it can take longer depending on call volume. Still better than being personally stuck on hold indefinitely!

Do you know if the employer has to formally offer this as a benefit? My small company (20 people) doesn't have an official education program, but my boss might be willing to reimburse me if I explain the tax advantages to her.

Your employer doesn't need a formal program with all the bells and whistles, but they do need to establish what the IRS calls an "Educational Assistance Program" to make the benefits tax-free. The requirements include having a written plan document, communicating the plan to employees, and not discriminating in favor of highly compensated employees. For a small company, this could be relatively simple - a basic written policy that outlines eligibility, approval process, and reimbursement limits. The company gets to deduct the reimbursements as a business expense, and you get the education without tax consequences. It's definitely worth bringing up with your boss, especially if several employees might benefit. Small companies often don't realize how straightforward implementing these programs can be.

You might want to be careful with that approach. "Other Itemized Deductions" is typically for deductions that aren't subject to the 2% AGI floor that used to apply to unreimbursed employee expenses. These include gambling losses (to the extent of gambling winnings), casualty/theft losses in federally declared disaster areas, and a few other specialized deductions. Work-related education expenses don't belong in this category. If you claimed them there last year, you might want to consider filing an amended return to correct it, especially if the amount was substantial. TurboTax sometimes allows entries in fields where they don't actually belong, which can create issues if you're audited.

This is really solid advice about documentation! I learned this the hard way when I got audited a few years back over some continuing education expenses. The IRS agent spent more time questioning my record-keeping than the actual legitimacy of the deduction. One thing I'd add - if you're going the side business route that others mentioned, also document the business connection clearly. I keep a simple spreadsheet showing how each course relates to specific services I offer or skills I need for client work. Takes 5 minutes but could save hours of explanation later. @Omar Hassan - do you know which online platforms offer the college credit partnerships? That sounds like a much cleaner path for future learning.