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Is is executive coaching tax deductible a business expense?

TL;DR

Executive coaching can be tax deductible as a business expense if it is directly related to your trade or business.

Detailed Answer

Executive coaching is deductible as a business expense if it is intended to improve skills required in your current business or trade. It should not be for personal development or to qualify you for a new trade or business. For example, if a business owner hires a coach to improve leadership skills to better manage their current business, this is deductible. However, if the coaching is for personal growth or to prepare for a new career, it is not deductible.

Where to Put It on the Tax Form

Schedule C (Form 1040), Line 27a for sole proprietors, or as a business expense on the appropriate line for corporations and partnerships.

Real World Example

A CEO of a small tech startup hires an executive coach to enhance decision-making and leadership skills to manage the growing team effectively. The cost of this coaching is deductible as it directly benefits the business operations.

Audit Risk & Documentation Tips

To minimize audit risk, keep detailed records of the coaching sessions, including invoices, a description of services, and how they relate to your business. Ensure that the coaching is not personal in nature and document the business purpose clearly.

IRS Reference

IRS Publication 535, Business Expenses

Relevant Industries

Small BusinessCorporate ExecutivesEntrepreneurs

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Disclaimer: This is for informational purposes only and should not be construed as tax or legal advice. Always consult your tax advisor.

Page created on July 15, 2025

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