Wednesday, January 20, 2010

More on tax deductions for part-time MBA

Today's Bucks blog on the NYT website runs a story that explains in more detail the circumstances in which MBA tuition becomes tax deductible. The key issue is that the MBA student must prove that the degree "maintains or improves the skills required for the taxpayer's current trade or business."

It turns out the rules for M.B.A.’s depend on whether individuals can prove that they were already established in a certain trade or business before going to get an M.B.A. and that the degree will help them maintain or improve their skills in that specific trade or business.

If they can demonstrate both, they can deduct whatever tuition costs their employer didn’t reimburse or offer to reimburse. And if they can’t — say they are switching careers or didn’t have qualifying work experience before heading to school — they can’t.

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