Educational business expense?

Question

I'm an insurance guy and I know that I deduct the cost of my continuing education and designations, licensing, etc. I never finished my college degree the first time around and now I am about a year and a half away from graduation. Since I began the completion of my degree in business after I got into this field with a marketing focus (which will qualify me for the Registered Financial Consultant designation), is there any way that I can deduct this as an educational expense?

I am an officer of an S-Corp, but do not have any ownership and only receive 1099 income. I also hate insurance guys who pretend like their freakin' accountants or lawyers and don't know where to draw the line.

Answer 1

Judy is correct in that your educational business expense is not deductible, however, she didn't point out that you could possibly be eligible for the Lifetime Learning Credit on your tax return. I have included the link to the IRS instructions regarding this. Oh, I see she must have gone back and edited her answer to include additional information. The mention of the lifetime learning credit wasn't there at first. And yes, if you had educational expenses for 2004 - 2006 you can go back and file amended tax returns (1040X). You should also check and see if your state has anything similar for edcuation credits/tuition deductions. If so you could file an amended state return(s) as well for those years.

Answer 2

S-Corp status is very tricky. First of all, to be deductible any expense should be ordinary and necessary for the business. Your education doesn't relate to your business. Second of all, having S corp prevents you from claiming education as a business expense. It will be considered as a distribution which has to be disclosed on K-1 form when you do a tax return for your corporation. Thus, it will be your income. The only place you can deduct educational expense will be your personal tax return. Than you have to make a choice between educational credit or deduction

Answer 3

Unless I'm misunderstanding the fact that you're going from insurance into marketing, Judy's right. Your degree isn't directly related to your current occupation, so you can't deduct the costs as legitimate business expense.

Here's the deal on the education credits you can take instead, though.

Unless you are being claimed as a dependent on someone else's return, these credits offset the taxes you owe. If you're still a dependent, you are not allowed to claim these. In addition, if you weren't the one paying the expenses (unless you're receiving student loans), you're not allowed to claim them.

-If you're paying on student loans you can deduct your interest on your loan. This is entered directly on line 33 on Form 1040, or line 18 on Form 1040A. You may not file Form 1040EZ and claim the deduction.

You can also deduct portions of your expenses for attending (tuition, books, etc.), but not living expenses. There are two of these credits. The Hope Scholarship Credit and the Lifetime Learning Credit. You can not claim both credits in the same year.

The Hope Scholarship Credit is only available while you are an undergraduate and if I understand correctly, you're not qualified for that now. Congrats! ;-)

The Lifetime Learning Credit allows you to deduct 20% of your qualified expenses, up to $10,000. The most you can claim as a credit is $2,000.

Both credits are claimed on Form 8863 which can be accessed at www.irs.gov, Forms & Publications.

Hope this helps!

Answer 4

No, it will qualify you for a new designation, and is not deductible. Still a good idea to finish the degree, though.

Check out the education credits (form 8863). You can most likely take a Lifetime Learning Credit for your tuition and fees for finishing your degree That might turn out better anyway than being able to take a business deduction for it. If you have paid tuition and fees for eligible classes in years 2004-2006, you could amend those returns to still get the credits.

Good luck.

Answer 5

No. No. No. you're comprehensive time graduate student. coaching section-time does not make that your comprehensive-time occupation, so which you won't be able to declare those costs as a company cost. you weren't even coaching comprehensive time and then returning to college section time so it incredibly is not an argument you're able to be able to make. the certainty which you *think of* you ought to desire to coach fairly of learn does not replace this. quit attempting to curve the tax regulation on your income. The tax regulation for sure states that your training is deductable. no longer something greater. Your learn costs, your shuttle, your lab costs, and so on at the instant are not products you could deduct. by how, the IRS mechanically questions any education cost listed on the schedule A. The IRS will additionally see your 1098 for training showing which you have been a registered student. The IRS is often waiting to work out which you haven't any longer had that section time activity very long--all of which ability you're able to lose on audit.

Answer 6

one of the other posters was mostly right but interest on student loans is not deductible if you make more than 65K check the rules on this but there is a sliding scale that goes away if you make more thanb 65 K