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Can you deduct the cost of your MBA tuition? A judge says yes.

(Adapted from the original article on

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Claiming a tax deduction for your MBA tuition can be an elaborate game with the IRS. (Photo courtesy of alan_cleaver2000)

(Adapted from the original article on www.mba-social.com)

Hello April! Tax season and rainy days are upon us, and a second year at Wharton sent us a link this week that resurrected a blog post from the New York Times about whether or not it was possible to deduct the cost of your MBA tuition when filing personal taxes in the United States.

The answer is yes…depending.

To do so, you need to be able to prove that before business school, you were established in a certain trade, business or industry, and that your MBA degree (down to the specific classes and coursework) is necessary for you to maintain your skills and status in that trade, business or industry.

As reported by the Wall Street Journal last January, a judge ruled in favor of a nurse who had pursued her MBA to advance her career – and could prove it. She did it without a lawyer.

"Ms. Singleton-Clarke’s encounter with the tax system shows what it can take for one individual to prevail over the IRS against the long odds: favorable facts, obsessive organization, and fearlessness. She says she didn’t have a lawyer because she couldn’t afford one."

If you can prove this with documentation from former and future employers, and have all your tuition and loan paperwork in order, then it’s a no brainer. If you can’t quite prove this, Times readers write that only a small percentage of post-grads people actually get audited…but file and deduct at your own risk.

We asked some of our readers at MBAsocial (and former classmates) if they pursued this scarcely known deduction (or is it well-know and we’re just behind the times?) and learned that a few of them have successfully done so.

Do you have a success story? Or are you considering doing this, too?

For more, check out http://mba-social.com.

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Comments

8 April 2011

Jenn Yee

Ka-Ming - Unfortunately my career path doesn't lend itself to these requirements, otherwise you can bet I would have tried! Some of my friends in high-tech have been able to claim the deduction, and others who were in financial services and continuing in it are looking to do so as well.

awesome....Have you tried this yourself Jenn? How much did you claim back from the taxman?