licensing supervision and fees


B

Brian Attwood

My wife is currently a school psychologist and is endeavoring to
become licensed. Becoming licensed will not advance her current career
in the public school system but will allow her to explore other
options outside of the public school setting.

As part of the requirements of becoming licensed she must be
supervised by a licensed psychologist, who in this case will be
charging for her time (>$600 over the year).

Can and how would we deduct these payments on our 2008 tax return?
Would we need to issue a 1099? Even if the answer to the first
question is no?
Are the exam fees deductible?

Thanks.
 
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E

eagent

My wife is currently a school psychologist and is endeavoring to
become licensed. Becoming licensed will not advance her current career
in the public school system but will allow her to explore other
options outside of the public school setting.

As part of the requirements of becoming licensed she must be
supervised by a licensed psychologist, who in this case will be
charging for her time (>$600 over the year).

Can and how would we deduct these payments on our 2008 tax return?
Would we need to issue a 1099? Even if the answer to the first
question is no?
Are the exam fees deductible?

Thanks.

--
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<< The foregoing was not intended or written to be used,   >>
<< nor can it used, for the purpose of avoiding penalties  >>
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<< ------------------------------------------------------- >>
We'd need more information, but it is very likely that there is NO
deduction here (sorry).

The rules for deductibility are pretty clear - IF the education or
associated costs QUALIFY you for a NEW occupation then you get no
deduction.

For example, as a tax accountant, if I went to law school to become a
tax attorney - even though I'd still work in the tax field and I'd
still be an owner of the business, I get no deduction because the law
degree qualifies me to work as an attorney.

For your wife, if the licensing will qualify her for NEW work, there
should be no deduction. I'd suggest you start by visiting
http://www.irs.gov/publications/p970/index.html and read through the
pertinient parts. I'd also stronly encourage you to contact a local
tax pro to review your situation.

Gene E. Utterback, EA, RFC, ABA
 
G

Gil Faver

eagent said:
We'd need more information, but it is very likely that there is NO
deduction here (sorry).

The rules for deductibility are pretty clear - IF the education or
associated costs QUALIFY you for a NEW occupation then you get no
deduction.

For example, as a tax accountant, if I went to law school to become a
tax attorney - even though I'd still work in the tax field and I'd
still be an owner of the business, I get no deduction because the law
degree qualifies me to work as an attorney.
Technically, the law degree does not qualify you to work as an attorney.
Passing the state bar exam does. I doubt the IRS will appreciate the
distinction.
 
H

Harlan Lunsford

eagent said:
We'd need more information, but it is very likely that there is NO
deduction here (sorry).

The rules for deductibility are pretty clear - IF the education or
associated costs QUALIFY you for a NEW occupation then you get no
deduction.

For example, as a tax accountant, if I went to law school to become a
tax attorney - even though I'd still work in the tax field and I'd
still be an owner of the business, I get no deduction because the law
degree qualifies me to work as an attorney.
(snipped...)

As an adjunct of this response, suppose Gene went to law school solely
for the purpose of taking courses that might help in the practice of
tax accounting, e.g. business law comes to mind.

Guess what? IRS says no deduction since part of law school course.

But if he took similar course in business law at local university, then
yes.

Talk about "strange"!

ChEAr$,
Harlan Lunsford, EA n LA
 
E

eagent

SNIPPED


Right.  But if it's the same occupation at a higher level in a new
context, I'd think it might qualify.  She's already a school
psychologist.  She wants to become qualfied to work as a psychologist
with private clients.


So if you do something that advances you in your career, but
coincidently happens to qualify you for different work then it is not
deductible?  I haven't researched this lately, but it seems a little
harsh.

Stu

--
<< ------------------------------------------------------- >>
<< 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 atwww.asktax.org.                 >>
<<         Copyright (2007) - All rights reserved.         >>
<< ------------------------------------------------------- >>- Hide quoted text -

- Show quoted text -
CORRECT - without question.

Gene E. Utterback, EA, RFC, ABA
 
D

D. Stussy

Stuart Bronstein said:
Right. But if it's the same occupation at a higher level in a new
context, I'd think it might qualify. She's already a school
psychologist. She wants to become qualfied to work as a psychologist
with private clients.


So if you do something that advances you in your career, but
coincidently happens to qualify you for different work then it is not
deductible? I haven't researched this lately, but it seems a little
harsh.
It seems harsh because it's TRUE.
 
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R

removeps-groups

My wife is currently a school psychologist and is endeavoring to
become licensed. Becoming licensed will not advance her current career
in the public school system but will allow her to explore other
options outside of the public school setting.

As part of the requirements of becoming licensed she must be
supervised by a licensed psychologist, who in this case will be
charging for her time (>$600 over the year).
In addition to the other responses, did you check out the lifetime
learning credit at <http://www.irs.gov/publications/p970/ch03.html>?
Not sure if you could use it, but it's worth a shot. BTW, even if you
could deduct the learning fees, it would be subject to the 2% limit,
which means it might be no benefit at all (combine all job and certain
misc expenses; only the amount over 2% of your AGI is deductible).
 

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