Private college tuition fee deductible?

[Tracy]

One of my clients went to private college to get promote from LVN to RN. She has to pay 20k tuition fee. Could I able to deduct as Cont. Education under Job expenses and MISC deduction on Sch. A?

Thanks again.
Tracy

[Gretel]

I don't know what LVN is and if promoting to RN constitutes a new profession. If so this would disqualify client from Sch. A deduction, otherwise all expenses including traveling should qualify.

[solomon]

My inclination is that it does not qualify one for a new profession - it is still nursing.

[S T]

Well

LVN is I believe licensed vocational nurse and of course RN is Registered Nurse - so not necessarily qualifying for new vocation but does raise the question whether or not deductible for educational requirements met for job.

Is it required to keep the taxpayer's present salary, status or job?
Education is not part of a program that will qualify the taxpayer for a new trade or business?

From TTB page 4-25

If a taxpayer receives more education than required by an employer or by law, the additional education can qualify as workrelated education only if it maintains or improves skills required for a taxpayer’s present line of work. This could include refresher courses, courses on current developments, and academic or vocational courses.

If the private college meets the tests of qualifying for Education Credits as in Tuition Credits or Lifetime could it be that those credits might be as tax beneficial as deducting as Job Education Expenses subject to 2% Misc Deduction Limitation?

Eligible educational institution. Any college, university, vocational school, or other post‑secondary institution eligible to participate in a U.S. Department of Education Federal Student Aid program. Eligible institutions include virtually all accredited post‑secondary institutions in the U.S. Some schools outside the U.S. also participate. Check with the school, or to find school codes for participating schools, go to www.fafsa.ed.gov/index.htm.

from TTB 12-9

Sandy

[FEDUKE404]

Vote for LLC

I think it would be a slippery slope to consider the expenses/travel as "business" expenses. The key issue there is does the training qualify someone for a new job - probably so.

My guess is things would be much smoother to consider the Lifetime Learning Credit for the allowable education expenses, sans travel.

FE

[gkaiseril]

My inclination is that it does not qualify one for a new profession - it is still nursing.

Have you checked for the professional licensing requirements for an RN?

If the individual needs to pass a special licensing exam, register, and obtain a special license from the state or federal government in which the individual is working, It appears there is are different licensing requirements for the LVN/LPN, RN, and Nurse Practitioner so within the medical community these are very distinct professions.

If I have to register as a Public Accountant and then become a CPA are the review courses, exam fees, and other courses for obtaining the CPA deductible?

The question is "does one need to take a licensing exam and register for this profession"?

[taxcraft]

LVN to RN

The RN position is a higher level of nursing than LVN...it is more managerial, not dumping bed pans. Yes RN's take an exam and are licenced by the state. I think it qualifies her for a new profession. Kinda like a blue collar and white collar difference.

[solomon]

Have you checked for the professional licensing requirements for an RN?

The question is "does one need to take a licensing exam and register for this profession"?

Have you checked the requirements for a psychiatrist to become a psychoanalyst lately?

As I recall, in some states it is 1500 hours and pass an exam.

Yet, the IRS literature says it does not qualify one for a new profession.

[gkaiseril]

WILL M. McEUEN III AND TRACY L. McEUEN, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent, http://www.ustaxcourt.gov/InOpHistor...en.SUM.WPD.pdf. Although not definative it does indicate the U.S. Tax Court thinking. It disallowed the cost of an MBA.

"From the record in this case, the Court concludes that petitioner's degree led to qualifying her to perform significantly different tasks and activities than she performed before the education. The education therefore qualified petitioner for a new trade or business.

Because petitioner's satisfaction of both "disallowance" tests of section 1.162-5(b)(2) and (3), Income Tax Regs., will prohibit the deduction of her educational expenses,..."

[Nashville]

Concentrate on Credits

...like Sandy said.

I'm familiar with an audit case where the auditor went so far as to ask the taxpayer to furnish a letter from his employer stating that "continuing education was necessary as a condition of keeping his job." His employer had encouraged him to learn more about his field but had never told him he would fired if he didn't do it. Since taxpayer could not get such a letter from his employer, auditor successfully disallowed the Sch. A deduction.

An aggressive auditor can disallow 95 out of 100 Miscellaneous deductions for education. But Educational credits/Tuition adjustment normally creates a failsafe tax benefit superior to an itemized deduction thrown in the 2% shredder.

Remember, Congress gave these credits as a stimulous to subsidize colleges and universities thus IRS has no particular agenda to dilute the benefit thereof, whereas they DO have an agenda to disallow personal deductions.