Deduct continuing education costs from taxes.
July 20, 2009 | 15,00 EUR | answered by Dipl.BW/SB Ulrich Stiller
My employer has offered me a termination agreement. The employment relationship would end on 31.1.2010. I plan to use the period of release (from around 1.10.) for further professional education. The education costs 6000 euros. Is it financially advantageous for me to pay for the education myself and then deduct it as business expenses from taxes, or would it be wiser to negotiate with my employer for them to pay for the training (and then reduce the severance payment by the corresponding amount)?
Dear advice seeker,
Thank you for your inquiry, which I would like to answer based on your information and in the context of your commitment in an initial consultation as follows:
If your current employer pays for these costs and you do not have to pay them back, then you should accept the offer and have your employer pay for this further education, as you will actually be reimbursed 100% of the costs by the employer. If there are business expenses related to the further education, you can deduct them 100%, but the tax savings depend on the amount of your personal income. For example, if you have a tax rate of 30%, then €6,000 lead to a tax savings of approximately €2,000, meaning you actually spent €4,000. If your employer covers these costs in full, then you will have no expenses at all.
I hope that my explanations have been helpful to you.
Yours sincerely,
Ulrich Stiller
Tax advisor
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