Hello all, I went back to school on1999 via distance education and got a BSN on 2002. I am currently enrolled in an accredited MSN degree, and I will be done on 2005. My employer informed me yesterday that I was no longer eligible for tuition reimbursement because I have gotten the 10K limit. The MSN program where I am going is pricey (325 a credit); therefore I am looking for alternatives to finance my master’s degree. I can make an effort and pay out of pocket, but this could create a difficulty in my family’s budget. My other option is to deduct these education expenses from my income taxes; do you know if it is permissible to deduct expenses for accredited online education from your income tax return? I would appreciate your any advice.
Bancho - the best advice is to consult a competent tax accountant who can better evaluate your personal situation. However, my general understanding is that educational expenses are deductible (subject to the 2% AGI rule) if they help improve your skills in your current position. The "2% AGI" business means that expenses up to 2% of your Adjusted Gross Income can't be deducted - but that you can deduct everything beyond that. Unless you have schedule C income to cover, I don't think you can beat the 2% AGI rule. As for what you can deduct - expenses (such as tuition, books, etc.) that make you a better nurse (assuming you are a practicing nurse now) including earning a masters degree probably qualify. If you puruse education in a new area, say to become a computer programmer, you can't deduct these expenses. Regards - Andy
In addition to the deduction that Andy describes, you may want to look into the Lifetime Learning Educational Credit http://www.irs.gov/faqs/page/0,,id%3D15736,00.html or the new educational incentive that allows up to a $3000 deduction for tuition and fees paid to attend an accredited university, college, or vocational school: http://www.irs.gov/newsroom/article/0,,id=105144,00.html Good luck, Alex
