Schedule C deduction of education expenses- help!
March 25, 2015 5:53 AM Subscribe
You are not an accountant or not my accountant, and I take full responsibility for verifying any information that you provide me.
I am doing an exec masters program and want to deduct the 60K in tuition for the two-year program from my schedule C expenses for a sole proprietorship LLC. Please assume that I can deduct my education expenses. The degree does not qualify me for a new position and improves skills needed for current occupation.
I can pay in cash for the program if I have to, but prefer not to because I was saving for a down payment on a house. However, if this makes a difference in my ability to deduct these expenses, then I'm willing to.
My questions are:
1) does it make a difference in my ability to deduct this if I pay for it using student loans instead of cash?
2) is it better if the tuition bills come in my company's name?
3) if I do not end up with enough profit to "cover" these expenses in the years that they are incurred, does this impact my ability to deduct?
4) can I take the deduction split over several years or only in the years that the expense are incurred?
Again, I will verify the legitimacy of any answers given. I'm still bootstrapping it and appreciate you humoring me, AskMe! Thank you in advance for any help!
I am doing an exec masters program and want to deduct the 60K in tuition for the two-year program from my schedule C expenses for a sole proprietorship LLC. Please assume that I can deduct my education expenses. The degree does not qualify me for a new position and improves skills needed for current occupation.
I can pay in cash for the program if I have to, but prefer not to because I was saving for a down payment on a house. However, if this makes a difference in my ability to deduct these expenses, then I'm willing to.
My questions are:
1) does it make a difference in my ability to deduct this if I pay for it using student loans instead of cash?
2) is it better if the tuition bills come in my company's name?
3) if I do not end up with enough profit to "cover" these expenses in the years that they are incurred, does this impact my ability to deduct?
4) can I take the deduction split over several years or only in the years that the expense are incurred?
Again, I will verify the legitimacy of any answers given. I'm still bootstrapping it and appreciate you humoring me, AskMe! Thank you in advance for any help!
Response by poster: In case anyone checks this, I finally got word from an accountant and confirmed with the appropriate IRS publication (although you should do your own verifications before relying on this info) that paying with loans does not change the ability to deduct it as a business expense.
posted by cacao at 11:28 AM on May 4, 2015
posted by cacao at 11:28 AM on May 4, 2015
This thread is closed to new comments.
1. 100% yes. If you pay for it using student loans, you are only able to deduct the interest you pay each year on those loans.
2. Probably.
3. This depends on whether or not your business has taken a loss in years past. The ratio of profit to loss also matters. If your expenses are 52% or more of your profit, you increase the odds of an audit.
4. I'm pretty sure you can deduct the amount you pay in cash each year for your degree as long as you are not not using loans.
This book was a godsend, by the way.
posted by jessca84 at 9:32 PM on March 25, 2015