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Hello,

I am currently a first year MBA student in a two year MBA program. I have heard from a few people that you are able to write-off your entire MBA if you stay within the same career field that you were in before going to school and after graduation. Is this true? If so, how do I do it? Do I have to wait until I graduate or can I write-off last year's earnings against my current expenses so far? Any help would greatly be appreciated.

Thanks.

Ron Hook
ronhook@yahoo.com
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Education expenses are deductible if they are to maintain or improve your job skills required in your employment OR if they are to meet the express requirements of your employer (or of a law or regulations) as a condition to retaining your salary or employment.

However, they are not allowed as a deduction if they are to meet the minimum requirements of your present or intended profession OR if they will lead to qualifying you in a new trade or business.

It does not matter if you stay in your current line of business or not. If you are a legal assistant and go to law school to get a degree in law, but remain employed as a legal assistant, the eduction is still not deductible. It qualifies you for a new line of business.

In any case, if the expenses are deductible, you deduct them in the year they are paid (or the year you get a student loan to pay them).

--Peter
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So Peter,

Just to make sure I get what you are saying, if the legal assistant got her law degree to become a lawyer and actually now practices law, she would be entitled to writeoff law school?

If so, in my case I am a 1st year MBA and had prior salary for tax year 2001. If my loans for the the fall totaled $20,000 let's say, can I write the $20K off and in 2003 notify the IRS that I did stay in the same career field and better'd myself with the MBA degree and a better job which required the MBA degree?

Thanks very much for all your help.

Ron Hook
ronhook@yahoo.com
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Just to make sure I get what you are saying, if the legal assistant got her law degree to become a lawyer and actually now practices law, she would be entitled to writeoff law school?

No - just the opposite. Go back and reread my post.

If so, in my case I am a 1st year MBA and had prior salary for tax year 2001. If my loans for the the fall totaled $20,000 let's say, can I write the $20K off and in 2003 notify the IRS that I did stay in the same career field and better'd myself with the MBA degree and a better job which required the MBA degree?

None of this is relevant in determining if your education leading to an MBA is deductible.

--Peter
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