CPA review course

[AccTaxMan]

A quick question.

Does the fee for CPA Review Course qualify for education credit?

Thank you.

[gkaiseril]

Right along with your Law School tuition, your Bar exam fee, and your Bar exam test prep fee.
.
No. This course is probably not offered by an eligible institution.
No. This course helps you qualify for a new profession and a professional license.

[Koss]

Yes, but...

I agree that it could not qualify for the education credit unless it was offered by an accredited college or university.

But under certain circumstances, it might qualify as a deductible work-related expense on Schedule A, or even on Schedule C.

If the taxpayer in question is already working in the field of accounting... then passing the CPA exam does not necessarily qualify the taxpayer for a new profession. It may simply make him more qualified at what he already does.

Actually...

Law school and medical school do qualify for the Lifetime Learning Credit.

And anyone taking college courses in accounting or finance, as part of a two-year or four-year degree, would qualify for the Hope Credit or the American Opportunity Credit. The fact that these courses may lead to a new profession does not disqualify them from the education credits.

The "qualifying the taxpayer for a new profession" is what disqualifies an expense from Schedule A.

And this is a gray area. The Tax Court has ruled both ways on tuition for an MBA program. In some cases, they have found that it qualified the taxpayer for a new job or profession. In other cases, based on the facts and circumstances, and the work the taxpayer was already doing while studying for the MBA, they have found that it did not qualify the taxpayer for a new job, but rather merely enhanced the skills that they already had.

BMK

[gkaiseril]

The CPA is a state licensed profession and is a different profession from being an Accountant. As is the Medical Doctor and Attorney.

See page 79 of IRS Pub 970.

"Education That Qualifies You for a New Trade or Business

"Education that is part of a program of study that will qualify you for a new trade or business is not qualifying work-related education. This is true even if you do not plan to enter that trade or business. If you are an employee, a change of duties that involves the same general kind of work is not a new trade or business.

"Example 1. You are an accountant. Your employer requires you to get a law degree at your own expense. You register at a law school for the regular curriculum that leads to a law degree. Even if you do not intend to become a lawyer, the education is not qualifying because the law degree will qualify you for a new trade or business.

Since CPA can perform certified audits and certify financial statements and an accountant can not certify financial statements nor perform certification audits. A CPA is alao a state licensed profession as is an attorney.

See page 76 of IRS Pub 970 for the Bar or CPA course:

"Bar or CPA Review Course

“Review courses to prepare for the bar examination or the certified public accountant (CPA) examination are not qualifying work-related education. They are part of a program of study that can qualify you for a new profession."

But and employee of a law firm or CPA firm can be reimbursed by his/her employer and the employer can claim the business expense.

Now once you are licensed as a CPA, Attorney or Doctor most additional degrees, like a MS in Tax, will be work related. The one exception is for a Master Patent Law since this is required by the U.S. Patent and Trade Mark Office to become a licensed Patent attorney. The USPTO offers a special exam and license.

And then you have:

Qualifying Work-Related Education
A taxpayer can deduct the costs of qualifying work-related education as business expenses. Qualifying work-related education is education that meets one of the following tests:

The education is required by the taxpayer's employer or by law to keep the taxpayer's present salary, status, or job. The required education must serve a bona fide business of the taxpayer's employer.
The education maintains or improves skills needed in the taxpayer's present work.

However, even if the education meets one or both of these tests, it is not qualifying work-related education if it is either of the following:

The education is needed to meet the minimum educational requirements of the taxpayer's present trade or business.
The education is part of a program of study which will qualify the taxpayer for a new trade or business.