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wm030303
wm030303, Enrolled Agent
Category: Tax
Satisfied Customers: 112
Experience:  I am both a CPA and EA with over 30 years of experience in solving tax related issues.
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Re education expense CPA review course deduction on 1040 Hello

Customer Question

Re: education expense CPA review course deduction on 1040

Hello: I spent A LOT of money on a CPA review course. Actually, I bought two courses. Becker was $2,700 and I bought some supplemental DVD's and books from another company so my total investment was maybe $3,500 in review material.

Plus I spent about $1,500 in testing fees since I didn't pass on my 1st atttempt.

I've passed the test at this point but I'm wondering if there is anyway to deduct the money. From my research the IRS appears to say no since they claim the CPA opens up a "new" line of work. But I was an accountant before and since accountant for large company so could I be an exception? The IRS mentioned review courses but didn't mention testing fees. So if review course NOT deductible could testing fees be deductible?
Submitted: 5 years ago.
Category: Tax
Expert:  wm030303 replied 5 years ago.

wm030303 :

Hello and welcome to Just Answer my name is Bill.If you were employed as an Accountant

wm030303 :

If you were employed as an accountant and these costs are incurred to improve your skills in your current job then they are deductible as employee business expenses.

wm030303 :

Review course and testing fees are all miscellaneous employee business expenses subject to the 2% AGI limitation.

wm030303 :

Actually I'm sorry review courses for the bar exam and CPA exam do not qualify for education expenses because they are expenses incurred that could qualify you for a new profession. See IRS Publicatio 970 chapter 12.

wm030303 :

I will understand if you ask for 2nd opinion and don't accept my answer.

JACUSTOMER-8zno3bj7- :

so even though I'm still doing basically same work pre/post CPA license I still can't deduct education CPA expenses? That includes both review course fees and testing fees? Total cost for me was appx $5,000.

wm030303 :

It would appear as if these costs are not deductible because you are now able to qualify for a new profession.

wm030303 :

Refer to publication 970 chapter 12, this is where the IRS says that these fees are not deductible.

wm030303 :

If you are working for a CPA firm and the employer requires you to become a CPA to maintain your job then these fees would be deductible.

wm030303 :

Hello again, I found the most solid answer in IRS Reg 1.162-5 which states that these expenses are not deductible no matter whether the employer requires you to become a CPA or whether you want to qualify for a new profession. I hope this has helped.

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