PE prep cost tax write-off?

[MEPE2B]

I have spent a considerable amount of money so far in pursuit of PE registration. My company will only reimburse me (after I pass the test ) for application and test costs, cost of stamp, wall certificate, and frame. The cost for all those books, calculator, travel expenses, hotel near test site, etc. will be out of my pocket. The question I have is: Is there any legitimate way to get any tax advantage, such as a deduction for business expenses? Did any of you deduct those costs? Thanks

 

[cement]

you can try. If you file an itemized return, I think prof fees have to exceed 2% of your gross adjusted income or sommat.

 

[Bellebot]

MEPE2B, Cement is on the right track.

On Schedule A from form 1040, lines 21 through 23, which include unreimbursed employee expenses (job travel, union dues, job education, etc), any tax preparation fees, and then investment expenses, safe deposit box, etc.

However, to get this deduction, this amount must be greater than 2% of your adjusted gross income, which is income before deductions and exemptions. Any IRAs, student loan interest, moving expenses not reimbursed by your employer, tuition and fees, alimony can be helpful in getting your adjusted gross income down.

So for instance, if your adjusted gross income comes down to say, $40,000, you would need your schedule A lines 21 through 23 expenses to be greater than 2% of $40,000, or $800.

More info can be found at www.irs.gov.

Hope this helps somewhat.

 

[FL PE]

Are exam prep fees a legit business expense in the eyes of the IRS? I took a $700 prep class and with my wifes college tuition we've paid out of pocket we will be above that 2%.

 

[MEPE2B]

Thank you very much for the guidance. It looks like I will be hard pressed to exceed that 2% threshold, but I'm going to keep track of everthing and hold all my receipts just in case.

 

[maryannette]

I looked at it last year and found that 2% would be hard to reach. Good luck, though.

 

[Bellebot]

Are exam prep fees a legit business expense in the eyes of the IRS? I took a $700 prep class and with my wifes college tuition we've paid out of pocket we will be above that 2%.

From my understanding, exam prep fees are a legitimate expense, as long as they are for career advancement in the same field, which for the FE, PE would be the case. If the exam was for a field different than engineering, I believe those are costs one must foot on their own. I hope this makes some sense.

 

[dfweyer]

my wifes college tuition we've paid out of pocket we will be above that 2%.

Tuition expenses can usually be deducted directly (with no 2% requirement), through a hope or lifetime learning credit depending on if this is Fres/Soph College or not. Otherwise there is a tuition deduction for up to $4000. Usually the credit is better than the deduction...talk to your tax preparer.

Publication 970 should help you out....

 

[tymr]

I looked at it last year and found that 2% would be hard to reach. Good luck, though.

Depending on your state business requirements you can set up an LLC in your name (eg. John Doe, LLC). Then you can write it off as a business expense. Some of us are fortunate enough to live in a great state that only requires a $70 filing fee and no atty. Then we get to write off study mat'ls, mileage, 50% of meals, and lodging. Check it out.

 

[Capt Worley PE]

And if you don't turn a profit after 4 years, they come after you for back taxes.

And penalties.

I'd be careful.

 

[tymr]

And if you don't turn a profit after 4 years, they come after you for back taxes.
And penalties.

I'd be careful.

The IRS tax code isn't that black and white and because they wrote the law they also include a nice little loop hole. My excellent CPA can explain it to you if you want her card.