Tax ruling clarifies deduction for educational costs

People who plan to deduct work-related tuition costs in the coming tax filing season may find that the process is easier thanks to a recent ruling by the U.S. Tax Court that clarified the procedure for such matters.

A recent Wall Street Journal report cites the case of a Maryland nurse who prevailed in her legal effort to deduct about $15,000 in tuition costs that were incurred as she worked on her MBA degree. In this case, the degree was earned by studying for an online program.

The report adds that because of this ruling, the complexities involved with such deductions should become simpler for many taxpayers, especially as they related to securing an MBA.

"The good news about the rising cost of higher education is that students and their families may take advantage of even more tax breaks and credits to offset expenses like tuition and fees," said John Hewitt, CEO of Liberty Tax Service.

The newspaper also cited the judge in the case as calling the plaintiff "articulate and well-prepared," while saying that many other taxpayers he sees in such cases are not.

For those who do plan to write off educational expenses for themselves or dependents this year, consulting with a qualified tax preparer is advisable, especially with a wide variety of federal deductions that can apply to such costs.


Liberty Tax Service provides computerized income tax preparation and electronic filing. Each tax office offers customers audit assistance, a money back guarantee, and free tax return checking.