education expense tax benefits

[Mark Bole]

Two recent threads on this topic require some clarification.
As mentioned, see Pub 970 "Tax Benefits for Education".

Several replies correctly stated that the "Business
Deduction for Work-Related Education" (ch. 12 of the pub)
only applies to education to maintain or improve current job
skills, not to begin a new type of work.

However, neither the Tuition and Fees deduction (ch. 6) nor
the Lifetime Learning credit (ch 3) carry this same
restriction. They both apply to education taken to
*acquire* or improve job skills (emphasis added). However
they apply only to expenses at a qualified educational
institution (but you do not have to be a degree candidate).
They also cannot include classes related to sports, hobbies,
etc.

Only one reply mentioned this, I found the others somewhat
misleading by omitting this important distinction, which
most likely applies to both OP's.

-Mark Bole

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[blaha]

Two recent threads on this topic require some clarification.
As mentioned, see Pub 970 "Tax Benefits for Education".

Several replies correctly stated that the "Business
Deduction for Work-Related Education" (ch. 12 of the pub)
only applies to education to maintain or improve current job
skills, not to begin a new type of work.

However, neither the Tuition and Fees deduction (ch. 6) nor
the Lifetime Learning credit (ch 3) carry this same
restriction. They both apply to education taken to
*acquire* or improve job skills (emphasis added). However
they apply only to expenses at a qualified educational
institution (but you do not have to be a degree candidate).
They also cannot include classes related to sports, hobbies,
etc.

Only one reply mentioned this, I found the others somewhat
misleading by omitting this important distinction, which
most likely applies to both OP's.

Well, in my situation, I am taking some accounting classes
because they will certainly help me maintain or improve my
current job skills. As a self-employed contractor, they
should be sch C business expenses, straight off the top.
Then I'm taking additional accounting classes that don't
seem to directly relate to my work, but, being offered at
the local college, will qualify for the Tutition and Fees
deduction. Now - my next point of confusion, Having
finished these accounting classes, I can then sit for the
CPA exam. Then, having passed it on my first try , I
still have 15 hours of college classes left to take in order
to get the 150 hour requirement here. I may get inspired
and take something work related. On the other hand, getting
a pilots license from the local community college, or just
taking something else fun also is possible. The point is, I
NEED these classes to become a CPA. As such, since I need
the classes, will there be a tax deduction available?

Thanks,

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
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[Mark Bole]

[...] Now - my next point of confusion, Having
finished these accounting classes, I can then sit for the
CPA exam. Then, having passed it on my first try , I
still have 15 hours of college classes left to take in order
to get the 150 hour requirement here. I may get inspired
and take something work related. On the other hand, getting
a pilots license from the local community college, or just
taking something else fun also is possible. The point is, I
NEED these classes to become a CPA. As such, since I need
the classes, will there be a tax deduction available?

I don't understand -- are you saying you need classes in
"pilots license from the local community college" to become
a CPA? (Although that would explain a lot...<grin>) The
Tuition and Fees deduction and the Lifetime Learning credit
are based on the rules in the IRS pub referenced earlier,
which generally (with exceptions) exclude sports, hobbies,
and so on.

-Mark Bole

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

 

[blaha]

What I need is 150 semester hours of college credit.
Any subject whatsoever; just 150 hours total.

30 hours to sit for the exam, but 150 hours of college
credit, and a batchelors degree.

If your a standard student, most of the schools have ways to
get those additional hours as part of your underrgrad
accounting curriculum. My school has a couple of extra
classes they recommend, plus some video tapes for
independant study. Usually it just takes one summer of
study. But in my case, it's just getting another 15 credit
hours. I've talked to other CPAs here, and it tends to be
taking whatever sounds like fun; cooking classes, history,
PE, whatever. I've thought getting a pilots license would
be fun.

Now - since the credit hours are required to become a CPA,
taking any classes I want to, even non-accounting related,
and totally business unrelated, what tax benefits are
available to me?

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

 

[Mark Bole]

What I need is 150 semester hours of college credit.
Any subject whatsoever; just 150 hours total.

Now - [...] what tax benefits are
available to me?

As answered previously: Tuition and Fees deduction or
Lifetime Learning credit (but not both) if you meet all the
other usual requirements. No business-related expense
deduction available for you in this situation.

-Mark Bole

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>