Tax Deductions for Law School Tuition

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digitalcntrl
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Tax Deductions for Law School Tuition

Postby digitalcntrl » Thu Jun 03, 2010 6:58 pm

Here is the deal, I work during the day and go to law school at night. I am looking to see if I can deduct my law school tuition from my gross income. I do deduct the $5,000 education tax credit everyone gets, however, I recall back in UG that I could deduct my entire tuition. I have a relatively high salary so there are no issues with low income credits or anything like that. Anyway to get the full amount as a tax credit while working full time???

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phoenix323
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Re: Tax Deductions for Law School Tuition

Postby phoenix323 » Thu Jun 03, 2010 7:06 pm

digitalcntrl wrote:Here is the deal, I work during the day and go to law school at night. I am looking to see if I can deduct my law school tuition from my gross income. I do deduct the $5,000 education tax credit everyone gets, however, I recall back in UG that I could deduct my entire tuition. I have a relatively high salary so there are no issues with low income credits or anything like that. Anyway to get the full amount as a tax credit while working full time???


This really seems like a question for a CPA. I know I wouldn't ask for tax advice from a bunch of 0L's. We're not generally known for making the best financial decisions :wink:

Good luck!
Last edited by phoenix323 on Thu Jun 03, 2010 7:38 pm, edited 1 time in total.

03121202698008
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Re: Tax Deductions for Law School Tuition

Postby 03121202698008 » Thu Jun 03, 2010 7:08 pm

digitalcntrl wrote:Here is the deal, I work during the day and go to law school at night. I am looking to see if I can deduct my law school tuition from my gross income. I do deduct the $5,000 education tax credit everyone gets, however, I recall back in UG that I could deduct my entire tuition. I have a relatively high salary so there are no issues with low income credits or anything like that. Anyway to get the full amount as a tax credit while working full time???


Pretty sure you could never deduct your entire tuition. If you did, you committed tax fraud. The max for tuition and fees deduction is $4,000 and you cannot take it and Hope/Lifetime learning credit at same time. If your MAGI is > $80K, you can't take it at all.

See chapter 7. http://www.irs.gov/publications/p970/ch07.html

Also, none of them are $5K and all phase out as your income rises.

digitalcntrl
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Re: Tax Deductions for Law School Tuition

Postby digitalcntrl » Thu Jun 03, 2010 7:23 pm

blowhard wrote:
digitalcntrl wrote:Here is the deal, I work during the day and go to law school at night. I am looking to see if I can deduct my law school tuition from my gross income. I do deduct the $5,000 education tax credit everyone gets, however, I recall back in UG that I could deduct my entire tuition. I have a relatively high salary so there are no issues with low income credits or anything like that. Anyway to get the full amount as a tax credit while working full time???


Pretty sure you could never deduct your entire tuition. If you did, you committed tax fraud. The max for tuition and fees deduction is $4,000 and you cannot take it and Hope/Lifetime learning credit at same time. If your MAGI is > $80K, you can't take it at all.

See chapter 7. http://www.irs.gov/publications/p970/ch07.html

Also, none of them are $5K and all phase out as your income rises.


Yea it was 4k, I remembered incorrectly what was on my tax returns. It could have been in my UG that I made less than the maximum deduction thus making income essentially zero. I do recall people saying you could deduct more if the course work was necessary for your job. Any thoughts??

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nealric
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Re: Tax Deductions for Law School Tuition

Postby nealric » Thu Jun 03, 2010 8:22 pm

No, one can't deduct law school tuition because law students are training for a new career, not enhancing their current one.


One can usually, however, take the lifetime learning credit (2k cap).

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quishiclocus
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Re: Tax Deductions for Law School Tuition

Postby quishiclocus » Thu Jun 03, 2010 8:52 pm

I am occasionally a tax preparer. I am not *your* tax preparer and this is not tax advice related to your specific situation.

You're likely eligible for one of two things: The tuition and fees deduction or the Lifetime Learning Credit. Both apply to (most if not all) law students. Lifetime Learning Credit applies to all postsecondary institutions *and* courses to gain job skills as separate categories. Neither applies to anything but tuition and course fees. (No room/board/books/etc.)

Tuition and fees deduction: Deduction from AGI. Up to $4000 deduction. Only if AGI is under $80k ($160k joint).

Lifetime Learning Credit: Nonrefundable credit. Up to $2000 credit. Phases out; max AGI is $60k ($120k joint).

You cannot take both; this is a one-or-the-other situation. Which you ought to take is, if you are not experienced with tax prep, something you really ought to leave to someone who is. Most preparers now use software which optimizes your education deduction/credit automatically given all your other tax information.

If you are taking courses because your job requires you to take those courses, they can be deducted entirely, but I don't think law school is ever going to be that. This is not the same as the tuition and fees deduction, as mentioned above. This is more for situations like "programmer's employer requires the programmer to take a course in a new programming language, but programmer must pay out of pocket; programmer deducts this as a non-reimbursed expense".

digitalcntrl
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Re: Tax Deductions for Law School Tuition

Postby digitalcntrl » Fri Jun 04, 2010 2:27 am

quishiclocus wrote:I am occasionally a tax preparer. I am not *your* tax preparer and this is not tax advice related to your specific situation.

You're likely eligible for one of two things: The tuition and fees deduction or the Lifetime Learning Credit. Both apply to (most if not all) law students. Lifetime Learning Credit applies to all postsecondary institutions *and* courses to gain job skills as separate categories. Neither applies to anything but tuition and course fees. (No room/board/books/etc.)

Tuition and fees deduction: Deduction from AGI. Up to $4000 deduction. Only if AGI is under $80k ($160k joint).

Lifetime Learning Credit: Nonrefundable credit. Up to $2000 credit. Phases out; max AGI is $60k ($120k joint).

You cannot take both; this is a one-or-the-other situation. Which you ought to take is, if you are not experienced with tax prep, something you really ought to leave to someone who is. Most preparers now use software which optimizes your education deduction/credit automatically given all your other tax information.

If you are taking courses because your job requires you to take those courses, they can be deducted entirely, but I don't think law school is ever going to be that. This is not the same as the tuition and fees deduction, as mentioned above. This is more for situations like "programmer's employer requires the programmer to take a course in a new programming language, but programmer must pay out of pocket; programmer deducts this as a non-reimbursed expense".


Thanks for the information it was great to know. Regarding the issue of required courses for a job, I work as a patent agent and thus my coursework is ostensibly essential to serving my client/firm better. Could this be argued as being a required course?? Not really sure what "required" means in this circumstance (e.g. required to keep your job, required by the firm, or simply required to do your job better). I will of course consult a CPA on this issue, however, just wanted to know if there was a snowballest chance of this argument working.

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napolnic
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Re: Tax Deductions for Law School Tuition

Postby napolnic » Sun Jun 06, 2010 10:15 pm

digitalcntrl wrote:
quishiclocus wrote:I am occasionally a tax preparer. I am not *your* tax preparer and this is not tax advice related to your specific situation.

You're likely eligible for one of two things: The tuition and fees deduction or the Lifetime Learning Credit. Both apply to (most if not all) law students. Lifetime Learning Credit applies to all postsecondary institutions *and* courses to gain job skills as separate categories. Neither applies to anything but tuition and course fees. (No room/board/books/etc.)

Tuition and fees deduction: Deduction from AGI. Up to $4000 deduction. Only if AGI is under $80k ($160k joint).

Lifetime Learning Credit: Nonrefundable credit. Up to $2000 credit. Phases out; max AGI is $60k ($120k joint).

You cannot take both; this is a one-or-the-other situation. Which you ought to take is, if you are not experienced with tax prep, something you really ought to leave to someone who is. Most preparers now use software which optimizes your education deduction/credit automatically given all your other tax information.

If you are taking courses because your job requires you to take those courses, they can be deducted entirely, but I don't think law school is ever going to be that. This is not the same as the tuition and fees deduction, as mentioned above. This is more for situations like "programmer's employer requires the programmer to take a course in a new programming language, but programmer must pay out of pocket; programmer deducts this as a non-reimbursed expense".


Thanks for the information it was great to know. Regarding the issue of required courses for a job, I work as a patent agent and thus my coursework is ostensibly essential to serving my client/firm better. Could this be argued as being a required course?? Not really sure what "required" means in this circumstance (e.g. required to keep your job, required by the firm, or simply required to do your job better). I will of course consult a CPA on this issue, however, just wanted to know if there was a snowballest chance of this argument working.


I believe (see IRC Reg. sec. 1.162-5(a)) that if it is a requirement for you to keep your job, it could be considered a business expense and deductible. But again, I really have no idea here.

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SeymourShowz
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Re: Tax Deductions for Law School Tuition

Postby SeymourShowz » Sun Jun 06, 2010 10:22 pm

nealric wrote:No, one can't deduct law school tuition because law students are training for a new career, not enhancing their current one.


Bingo. But I've wondered it you could possibly deduct the cost of attaining an LLM..

digitalcntrl
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Re: Tax Deductions for Law School Tuition

Postby digitalcntrl » Wed Jun 09, 2010 7:12 pm

nealric wrote:No, one can't deduct law school tuition because law students are training for a new career, not enhancing their current one.


One can usually, however, take the lifetime learning credit (2k cap).


I am not really training for a new career. I am just increasing my skill set to better argue on the behalf of my client (getting paid higher is also a bonus).

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ggocat
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Re: Tax Deductions for Law School Tuition

Postby ggocat » Wed Jun 09, 2010 7:34 pm

digitalcntrl wrote:
nealric wrote:No, one can't deduct law school tuition because law students are training for a new career, not enhancing their current one.

One can usually, however, take the lifetime learning credit (2k cap).


I am not really training for a new career. I am just increasing my skill set to better argue on the behalf of my client (getting paid higher is also a bonus).

Sounds like a losing argument.

I recommend poking around on the IRS website. You will probably find something on point.

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napolnic
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Re: Tax Deductions for Law School Tuition

Postby napolnic » Wed Jun 09, 2010 9:37 pm

digitalcntrl wrote:
nealric wrote:No, one can't deduct law school tuition because law students are training for a new career, not enhancing their current one.


One can usually, however, take the lifetime learning credit (2k cap).


I am not really training for a new career. I am just increasing my skill set to better argue on the behalf of my client (getting paid higher is also a bonus).


Not enough. See my earlier post.




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