Tax Research Project 1

Tax Research Project 1

Lizzthalia Del Valle

ACCT 323

July 8, 2012

Tax Research Memorandum

To: Lauren Smith

From: Tax Accountant, CPA

Date: July 7, 2012

Re: Deductibility of Education Expenses

Facts

You incurred $15,000 in education expenses during the tax years for your MBA. You would like to deduct these expenses on your tax return as an employee business expense.

Issue

The issue is (1) whether education expenses can be deductible on the tax return as an employee business expense, and (2) weather your employer not having an education expense reimbursement program will have an effect.

Rule

Education expenses may only be deduct as an employee business expense when the education is pertaining to the current work.

Analysis

It is well established that education expenses may be able to be deducted as work-related educational expense during the tax year as an itemized deduction on Form 1040, Schedule A. To classify these expenses as deductible your education must (1) maintain or improves your job skills, or (2) is required by your employer or by law to keep your salary, status to work. However your education expense cannot be to qualify you for a new trade or job.

Education expenses that can be deducted include:

Tuition, books, supplies, lab fees, and similar items

Certain transportation and travel costs, and

Other educational expenses, such as the cost of research and typing (http://www.irs.gov/publications/p970/ch12.html)

Conclusion

Based on the analysis above, it is clear that your education expenses may be deducted in this tax years return as a business-work related expenses. These education must pertain to your current work. According to what is has been provided to us you have been a director and improvement coordinator that was responsible for management reports and supervising over 110 nurses and technicians. Your MBA program offered you an...