Tax Writeoffs for Grad School?

Discussion in 'Off-Topic Discussions' started by SurfDoctor, Jan 16, 2011.

Loading...
Page 1 of 2
  1. SurfDoctor

    SurfDoctor Moderator

    I was just talking with my tax man about trying to write off some of my doctoral classes on my 2010 taxes. He looked at me blankly and said he was not aware of any way to do that. I remember reading a few posts here on DI saying that you can use a "lifetime education" credit or something similar. What are my options for getting a little help on my taxes; does anyone have any experience with that?

    Here is what I find on About.com. Will this work with grad school?

    "The Tuition and Fees deduction reduces taxable income. The Hope Credit and Lifetime Learning Credit, however, provides a tax credit based on a percentage of your qualified college expenses. The American Opportunity credit replaces the Hope credit for 2009 and 2010, and provides a partially refundable credit. Generally, taking a tax credit will provide a greater benefit than a deduction. The education tax credits are calculated on IRS Form 8863 (PDF)."
     
    SurfDoctor, Jan 16, 2011
    #1
  2. Maniac Craniac

    Maniac Craniac Moderator Staff Member

    If you can justify your Ph.D as an expense directly related to employment, or even easier- contract or subcontract work, you can write it off on your tax return. As I mentioned, MUCH easier for contract work, since you can place it as a business expense. For a teacher like you, it would probably have to be an education degree, and even then, the IRS is not a willing participant, even though the law might be in your favor. I'd suggest more research, but if it really is directly related to your job, then it is possible to write it off. However, don't be surprised if the IRS expects you to document and prove it beyond any doubt.

    Secondly, Y-E-S! There is a program called the Lifelong Learning Credit. It doesn't matter what you use it for, nor how many times you use it. For the entire rest of your life, you can itemize ANY educational expenses (I mean it, this thing is unbelievably flexible) on your tax return. The credit is worth 20% of all money spent on education. It is a spectacular option if you can not find a way to write it off, or if your tax burden would make writing it off not as valuable as the 20% return on your money.
     
    Maniac Craniac, Jan 16, 2011
    #2
  3. Maniac Craniac

    Maniac Craniac Moderator Staff Member

    Maniac Craniac, Jan 16, 2011
    #3
  4. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    SteveFoerster, Jan 16, 2011
    #4
  5. Maniac Craniac

    Maniac Craniac Moderator Staff Member

    :iagree:

    Education is a major source of tax writeoffs; if he doesn't know about the itty bitty .pdf that I just sent you, then I shudder to imagine what writeoffs you might be missing in other areas of tax liability.
     
    Maniac Craniac, Jan 16, 2011
    #5
  6. SurfDoctor

    SurfDoctor Moderator

    Yea, I think you are right; and yet he's a CPA. The guy always seems reluctant to allow me many write-offs in any circumstance. I might jump ship with him for next year.
     
    SurfDoctor, Jan 16, 2011
    #6
  7. SurfDoctor

    SurfDoctor Moderator

    Yea, MC. I tend to agree. I'll probably dump him for next year. The problem is that he's a personal friend, so it will cause some issues. He is so squeaky clean that I don't have to worry if I ever get audited, but I'm afraid he is letting Uncle Sam fleece me. He also charges me $450 to do my taxes and that seems a little high. He is a CPA, so maybe that affects the price, I don't know.
     
    Last edited by a moderator: Jan 16, 2011
    SurfDoctor, Jan 16, 2011
    #7
  8. Maniac Craniac

    Maniac Craniac Moderator Staff Member

    Honesty and friendship are invaluable, but it looks like education is not his expertise.

    If you do dump him as a tax preparer, it might still be a good idea to send the .pdf his way, since it could be of great benefit to your friend's practice.
     
    Maniac Craniac, Jan 16, 2011
    #8
  9. SurfDoctor

    SurfDoctor Moderator

    Yes, thank you for that .pdf. I'm going to print it out and bring it to my appointment with him.
     
    SurfDoctor, Jan 16, 2011
    #9
  10. Maniac Craniac

    Maniac Craniac Moderator Staff Member

    Maniac Craniac, Jan 16, 2011
    #10
  11. mattbrent

    mattbrent Well-Known Member

    This is precisely why I love TurboTax!

    -Matt
     
    mattbrent, Jan 18, 2011
    #11
  12. SurfDoctor

    SurfDoctor Moderator

    You have had good experience with Turbo Tax? I'm afraid of it. One big mistake and it's hello IRS auditor.
     
    SurfDoctor, Jan 18, 2011
    #12
  13. edowave

    edowave Active Member

    I've been using the H&R Block software for years. And yes, it knows about the Lifetime Learning Credit and Hope Credit. They claim if you get audited by the IRS using their software, they will represent you.
     
    edowave, Jan 18, 2011
    #13
  14. BlueMason

    BlueMason Audaces fortuna juvat

    Wait - is that for a PERSONAL income tax return? I pay $80 for a personal income tax return here in .ca (and keep in mind my accountant has to look at tuition etc. from a US University and my wife who's schooling is in homeopathic medicine). I don't know what the norm is but $450 seems outrageously high ... especially from a 'friend'.

    Sometimes doing business with friends is not worth the trouble it can cause if there are disagreements, and when it comes to money, those are seemingly inevitable.
     
    BlueMason, Jan 18, 2011
    #14
  15. Ian Anderson

    Ian Anderson Active Member

    I do my tax returns by hand every year (including schedule C) and usually do not even bother to check it. The IRS and state send me a bill if I underpay or a refund if I overpay.

    Why pay a CPA unless you have a very complicated tax situation.

    I take the lifetime learning credit most years. IRS Publication 970 is very easy reading.
     
    Ian Anderson, Jan 19, 2011
    #15
  16. mattbrent

    mattbrent Well-Known Member

    Oh yes. I've been using TurboTax since I started paying taxes on my own. Basically I was in college and didn't know who to go to, so I just went online. I really enjoy the program. I use the online version, which, I believe is identical to the ones sold in stores, but you don't have to pay until you file. My wife and I have had no problems. It asks so many questions to ensure you've covered every nook and cranny. It also does an audit check to see if there are any red flags that could cause an audit. We've been fortunate so far, and because of TurboTax we've gotten deductions and credits we never knew about, so I'd definitely recommend it.

    -Matt
     
    mattbrent, Jan 20, 2011
    #16
  17. SurfDoctor

    SurfDoctor Moderator

    Wow, sounds good. Maybe I'll get up the courage to try it. My CPA friend who does my taxes says a person is an idiot to use it, but then again, this is the guy who is charging me $450 a pop. I wonder who the real idiot is? Don't answer that!
     
    SurfDoctor, Jan 21, 2011
    #17
  18. Maniac Craniac

    Maniac Craniac Moderator Staff Member

    Weeeeeeeell.....
    Nevermind.
     
    Maniac Craniac, Jan 21, 2011
    #18
  19. SurfDoctor

    SurfDoctor Moderator

    What does it cost you to use the H&R Block software? (If I may ask)
     
    SurfDoctor, Feb 5, 2011
    #19
  20. edowave

    edowave Active Member

    I usually shop around for the best deal between Staples, OfficeMax, Best Buy, Amazon, etc. Ranges from $20 - $60 depending on the version you need (Basic, Deluxe, or Premium.) For a lot of people, the online FREE edition will just be enough (Turbo Tax offers one also.) I'm pretty sure even they cover educational credits too. Wouldn't hurt to start off with that, and if you find it isn't enough, then pay for the upgraded versions.
     
    Last edited by a moderator: Feb 5, 2011
    edowave, Feb 5, 2011
    #20
Page 1 of 2

Share This Page