MBA/masters & tax deductions

Can a self-employed business-person get an MBA, or Masters in Business, as a tax deduction?

Thanks.

 

Interesting. I'm certainly no tax accountant or tax lawyer. As such I am offering no legal or accounting advice and you should see your accountant or attorney re same. I do seem to vaguely remember that the deductibility of one's education expenses depended on whether one's employer required you to get another degree after you already had the position (e.g., teachers and accountants who originally obtained their positions when a bachelor's degree was considered okay but were then told to go get master's degrees in order to keep their jobs). As a self-employed individual, you might ask your accountant/attorney if it makes a difference if you run your grad school tuition through your company rather than paying for it as a private individual. - Ted.

 

I'm doing it ... as per my accountant.

 

Yes. Up to $2000.00 credit per year. Note this does not count if your company is paying for it (if you were employed).
For example, I receive $5250 a year from my company for school and related costs. If I spend $7250 a year on school, ($2k over) I can then claim the $2k on my taxes.

I personally think *any* costs for education should be tax deductible.

 

Yes...under the lifelong learning credit up to 2,000 or a max of 20% of eligible costs up to 10,000 (or your max deduction, 2,000)

William

 

There are a few caveats though; if your Modified Adjusted Gross Income is 52K (single) or 105K (filing jointly) or above, you lose this credit. Also, since you are self-employed, you cannot write these expenses off as a business expense and claim the credit (common sense). Lastly, it is 20 percent of your qualified expenses, e.g. you spend 6,000 this year on tuition, you can only write of 20% of that amount, or $1,200. The good news is this credit does not go away after a few years, as the Hope credit does, and you do not have to be a degree seeking student, you can be taking classes for professional development, etc. Hope this helps.

William Parker

 

I am not a practicing accountant, but you may be able to deduct all the tuition expenses as a business expense for yourself. You would need to have an accountant look into it...likely along the lines that the MBA is needed to expand or better manage your business, or something along those lines...


William Parker
Upper Iowa University, BS Accounting (2004)
Morhead State University, MBA (current student)

 

This is very interesting, I'll have to see if I qualify. Also, scubasteveiu... your reimbursement figure is suspiciously similar to mine. Do you also work for the large corporation with the boring blue logo?

 

The way my accountant works this is, I believe, as follows: My S-corp offers an "educational benefit" to all of our employees (one employee, that one being me - lol).

It becomes a nice easy (tax-free) way of getting money out of my S-Corp.

Cheers.

 

From what I looked up you are correct Unixman. A cost benefit analysis will tell you which is more advantages to you as a write off, the tax credit or the reduction in taxable income. Furthermore, there are things you cannot write off under the Lifelong Learning Credit, but as a business expense all expenses associated with the educational expenditures would be a business write off. "Rock of the Marne" Remember, it is tax planning, not tax evasion, lol...

SFC W Parker
"Scouts Out"

 

No, I work in the student loan industry. The $5250 is the max amount a company can claim as a write-off. Also, any more than $5250 a year and you would have to pay taxes on that amount.

-Steve