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Financial Planning / Tax Strategies
|Subject: Re: Is Tuition deductible?||Date: 12/9/1999 11:28 PM|
|Author: BladeXrunners||Number: 22740 of 122629|
I attended college in 1999 part-time while I was a full time employee for a company I've worked for for 3 years. The courses led up to receiving a B.S. in computer science. Is the tuition for this deductible as a misc. item on my Itemized decution form?
Maybe. You must NOT meet these 2 conditions: 1) the education is needed to meet the minimum educational requirements of your trade or 2) is part of a program that can qualify you for a new trade. If you don't meet either of the above 2 conditions and you meet either 1) it is required by your employer or by law to keep your present salary, status, or job or 2) it maintains/improves skills needed in your present work, then you can deduct educational expenses (tuiton, fees, book, travel, etc).
So what does this means? If you're working as a "computer scientist"--whatever that means, and your company would had hired you whether you have a degree or not, then the educational expenses are deductible. If your company only hire people with B.S. and messed up and hired you even though you didn't have a degree, then it's not deductible (the education is required for the minimum educational level). If you're a receptionist workin in a software company, then it doesn't (the education qualify you for a new trade). If you're a "computer handler", then it's up to you to convince the IRS that the B.S. Computer Science only maintain/improve your skill and does not qualify you for a new "trade"; i.e. you have to convince that them that someone with a B.S Computer Science will be doing what you're doing.
Don't forget you may qualify for HOPE Credit or Lifetime Learning Credit (they're credit for education). So even if your education doesn't qualify as a deductible educational expense, it may qualify for HOPE Credit. If not, most qualify for the Lifetime Learning Credit.
To qualify for HOPE, you must be a freshman or sophomore, taking classes leading to a degree/credential, is taking at least one-half of the normal full-time work load, and you must not had been convicted for felony possession/distribution of a controlled substance. The HOPE credit 100% of the first $1,000 and 50% of the next $1,000. (In case you didn't know, credit is subtracted from your tax liability whereas deduction is subtracted from you income).
To qualify for the Lifetime Learning Credit, you must be enrolled in an eligible educational institution. The credit is 20% of the first $5,000.
As always, there is an income phaseout. So check with the IRS publication for the range and also for what may be claimed as "expenses".
Thanks in advance. Also can you deduct money spent on suits to go on job interviews? It's a stretch but I'm just curious.
Nice try. A general rule of thumb, if "it" can be used for something else other than "its intended purpose", then you can't deduct "it". In this case, you can wear a suit whether or not you go on job interview, so money spent on suits for job interviews is not deductible. But everything else relating to finding/keeping a job is deductible (see the rule of thumb, though). For example, if you have to fly to Hawaii for a job interview, then those costs are deductible. Now if you flew out 2 days early or stay 2 days later, then you'll have to convince the IRS why that was required for your interview.
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