Tax question about education expense

[LeeH]

My wife is a pilot. She flies a CRJ600. In 2004 she took a 737 type rating course in hopes of getting hired by Southwest.

As I read the IRS publications I don't think this is deductible. She says that everyone she's talked to says it is a legal deduction. Anybody know for sure?

The course was not required for her current job.
It was not required by her employer.
It was taken in order to get a job with a different company.
She had an interview, but did not get the job.

[Argeo]

Back when I was studying tax in 2003 it was not allowed because it wasn't required to keep job. I think the IRS would say no because of that reason but an accountant would say yes because she is improving skills she already has. Very little is black or white in Tax law. I would say that perhaps her company may require her someday to have that license. It enhances or improves skills required in her present position and does not qualify her to perform a substantially different position. She is still going to be a pilot. It is debatable. I would do it.

Have you looked at the Hope or Lifetime Learning Credits? See if they still exist.

Good luck.

[Moneyguy1]

It would all depend on the individual reviewer. Technically, it is not.

[Argeo]

Well, if you want to be safe, scrap it and try those two credits. Preferably Lifetime. Just don't file married filing seperately. Depending on tax bracket and cost of class, I bet a credit would be more worthwhile anyways.

Oh, interesting tidbit. If you have a felony drug conviction you can not get a Hope Credit but you can get a Lifetime.

Good luck.

[Franklin]

Expenses for job hunting are deductible, but, they go in the "other business expenses" part of schedule A and must be greater than 2% of your adjusted gross income. That is what is known as "the catch". Usual disclaimers.