1. You create your own bookkeeping LLC. 2. You provide bookkeeping services to your parents’ LLC. 3. You are studying accounting as an undergrad. 4. Your LLC pays for your accounting degree and deducts it as a business expense. Can I do this as a deductible tax expense as undergrad?

The short answer is no, this setup almost certainly does not work for deducting your undergraduate accounting degree.

The core problem is that education expenses are only deductible as a business expense when the education maintains or improves skills in your current trade or business. An undergraduate degree that qualifies you for a new career or profession fails this test, even if the subject matter relates to your existing work. The IRS is explicit that education expenses are not deductible when they qualify you for a new trade or business, and courts have consistently applied this rule to degree programs.

Here is why the LLC structure does not help you get around this. The LLC is just a pass-through entity, so the IRS looks at what the education is actually for, not who is technically paying for it. If you are an undergrad studying accounting, the degree is qualifying you for a profession, not maintaining skills you already use. The fact that you are providing bookkeeping services now does not change the nature of the degree itself. The IRS would likely disallow the deduction on audit.

There is a narrow scenario where this could work differently. If you were already a credentialed accountant or CPA taking courses to maintain your license or sharpen existing skills, that education could be deductible. But a foundational undergraduate degree does not fit that mold.

The American Opportunity Credit or Lifetime Learning Credit might give you some tax benefit for tuition on a personal return, which is worth exploring instead.