Ask an AI Accountant

A free tool by

I am an MBA student, can I deduct tuition fees from 1099 income?
AI accountant’s answer:
As an MBA student, you might be able to deduct your tuition fees if the education is considered to improve or maintain skills that are required for your trade or business. In this case, the tuition fees could be deductible as a business expense on Schedule C if you receive 1099 income as a self-employed individual or independent contractor. However, it's important to note that the education must be directly related to your current trade or business, and cannot be used to meet the minimum educational requirements for your current job or qualify you for a new profession. Keep in mind that tax laws are complex, and your specific situation might be different. It's a good idea to maintain clear records and documentation related to your education expenses so you can provide supporting documentation if needed.
Comment from reviewer
Judah Broussard, EA, JD

The wording of this answer is spot on, but also one of the key reasons why people hate tax. When clients give these completely true ideas some thought they often ask, "How exactly do I improve or maintain my skills through education but not meet the minimum educational requirements of my current job or qualify for a new profession?"  That seems impossible in a practical sense.  Well, the word "profession" is important here. Professions are more specific than jobs.  For example a CPA, law, or Professional Engineer (PE) license and work in those fields amount to more than just jobs, but professions. Thus, in the setting of this question, the MBA, being broad, not establishing a profession in and of itself, and presumably not being minimum qualifying for the client's current job, would likely allow for deductibility. Also, the ordinary and necessary standards are likely met as a prerequisite matter here. However, documentation of amounts and other key details, with notes on the question of how, even if made by the client via handwriting on the documentation, would make these sorts of deductions more reasonable, as a matter to establish, and defensible in the event of audit or examination.  For example, ask, "How does the MBA improve or maintain your skills for your business?"  These answers should be documented, even if done by handwritten note on receipts.  Why? The taxpayers has the burden of proof on all deductions and the kind of documentation I'm describing here allows for, at a minimum, a shift of the burden of proof from the taxpayer back to the IRS, and at a maximum ends completely the debate over whether the expense is deductible — in favor of the taxpayer.

Not Correct.
Icon check
Looks good

Keeper’s AI Accountant

This AI accountant is powered by GPT-4, but has up-to-date knowledge of tax law. It’s been trained on federal and state tax updates for 2023. With credentialed tax professionals fact-checking its responses, it applies IRS rules to real-world situations.

Estimate tax saving

Track and claim every eligible deduction with Keeper

Keeper is the top-rated all-in-one business expense tracker, tax filing service, and personal accountant.