Professional license fees for retirees?


S

Salmon Egg

I am I licensed professional engineer. I am essentially retired. I have
little likelihood of ever getting significant income from the practice
of engineering although I would like to do so. Nevertheless, I renew my
license every few years by paying a fee to the state. I would have to
start from scratch to get a new license if I let it lapse for a
significant time. Legally, I am not allowed to offer engineering
services without the license.

More out of curiosity than true necessity, are such registration fees
deductible?

Bill
 
Ad

Advertisements

S

Salmon Egg

Yes, if you have the intent of making a profit. I'd say you must be
trying to make a profit, advertising, etc, so if you just renew your
license and do nothing with it, I don't think that would qualify, but
as always need to see the specific facts.

Please ready business versus hobby first:

http://www.irs.gov/newsroom/article/0,,id=172833,00.html

Then remember that you need to keep good books, separate bank account
for your Schedule C business, etc.
I read your reference. It has helped me sharpen what the problem is.

There is no point to having an engineering license except for earning
income. To putter with electronics or computers as a hobby does not
require a license except for a rare public safety issue. I keep the
license current in case I can find engineering consultation. Such gigs
have been very scarce over the last few years. If necessity drove me to
seek engineering clients, getting a new license would be virtually
impossible in my current situation. Fortunately, it is not a necessity.

My best analogy would be that of a retired physician. I suspect a
physician would try to keep a license current just in case a good
opportunity arises or it becomes necessary to practice again because of
necessity. I presume that it would be difficult for a physician to get a
new license if his original has expired.
 
S

Stuart A. Bronstein

Salmon Egg said:
There is no point to having an engineering license except for
earning income. To putter with electronics or computers as a
hobby does not require a license except for a rare public safety
issue. I keep the license current in case I can find engineering
consultation. Such gigs have been very scarce over the last few
years. If necessity drove me to seek engineering clients,
getting a new license would be virtually impossible in my
current situation. Fortunately, it is not a necessity.
The point was that you need to provide evidence that you intend to
use the qualification to make money. So you have to show that you
have advertised for business or applied for jobs requiring the
license. Just the fact that it would be nice for you to keep the
license in case some use for it suddently appears in the future
without any input from you will be seen by the IRS as insufficient.
 
Ad

Advertisements

S

Steve Pope

The point was that you need to provide evidence that you intend to
use the qualification to make money. So you have to show that you
have advertised for business or applied for jobs requiring the
license. Just the fact that it would be nice for you to keep the
license in case some use for it suddently appears in the future
without any input from you will be seen by the IRS as insufficient.
If one is still at risk (say one's work is warranteed, or still
subject to inspection, or otherwise may require followup) I think
it could be argued that one needs to keep the license even if there
are no new revenue prospects.

An analogy might be a CPA keeping their license solely for the
purpose of sustaining audits on past years' work. (Except CPA's
may not do as much fixed-price work as engineers.)


Steve
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top