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Old 12-29-2011, 10:29 PM
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MBA Tuition Deduction

I am looking to work with a CPA who has worked with clients to assess MBA tuition deduction eligibility and has successfully helped individuals avail of the related tuition deduction.

Looking at the IRS publication (flow chart) I think I qualify for the deduction but would like to work with a professional who has done this successfully before.

(I am in NJ.)


Last edited by rajpal_2005 : 12-29-2011 at 10:31 PM.


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Old 12-30-2011, 03:43 AM
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Deducting your MBA expenses can provide you with significant tax savings. First, the education must be related to a trade or business which you are carrying on. Attending graduate school full time generally precludes being actively involved in a trade or business. However, this is not, in and of itself, fatal. Assuming that you were engaged in a trade or business before coming to school (nowhere explicitly defined by the IRS, but significant work experience like that of most MBAs would generally qualify), a temporary leave of absence or other suspension of involvement in a trade or business is allowable. The IRS defines temporary as less than one year.
Secondly, the education must not be a minimum educational requirement for qualification in your trade or business, nor can it qualify you for a new trade or business. This disallowance criteria is generally not applicable to most MBAs pursuing graduate study in business, since their undergraduate degree will usually satisfy minimum entry requirements in most firms.
Finally, the education must maintain or improve skills required in your profession. You are generally a good candidate to deduct your MBA expenses if you had strong business skills prior to business school. It’s acceptable to change industries and employers when you graduate. However, you must be able to demonstrate that your MBA maintained & improved your business skills and you’ll continue to use them in the position you take when you matriculate. Furthermore, many MBA classes are general in nature and are applicable to a wide range of management tasks and problems. Even more specialized classes i.e. a corporate tax class, should be valuable to most managers, but without qualifying them for a new trade or business. However, the language in the regulation and case law with respect to this limitation is so vague that it would be possible for the IRS to make such an assertion and very difficult for an individual to prove otherwise. You ALSO need to maintain or improve skills required doing your present work , the case law on this issue varies, but it is clear that the more business-like your old career and duties, the more likely you will be considered to be maintaining or improving skills. Each person must analyze their specific circumstances in evaluating whether or not they qualify to take a tax deduction for graduate school.
Please visit the case study(NYT ): When You Can Deduct the Cost of Your M.B.A. - NYTimes.com



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Old 12-30-2011, 09:04 AM
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Thanks - I am doing this part-time, so given the information above I feel confident that I should be able to qualify for this deduction.
Does this forum contain any recommendations/references for any CPAs for the same?



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Old 12-30-2011, 09:26 AM
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I guess you can vist the website here for more information you want:Find a local tax professional, accountant, cpa, financial advisor near you!



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