Can I deduct Fellowship Expenses?

[njmedresident]

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Hi -

This thread was started on another section of the forums but I'm still not getting a straight answer so I thought I'd ask it again.

I am a pgy-3; I spent about $2,200 last year in Fellowship expenses (thankfully matched). Can I deduct these on my tax returns?

this is from the previous posts:
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Actually, the IRS allows deductions for expenses to obtain a job in the SAME field only:
Job Search Expenses
You can deduct certain expenses you have in looking for a new job in your present occupation, even if you do not get a new job. You cannot deduct these expenses if:

* You are looking for a job in a new occupation,
* There was a substantial break between the ending of your last job and your looking for a new one, or
* You are looking for a job for the first time.

They don't allow deductions for a job in a new field (which is why residency doesn't count, because med school isn't a job any anyone starting residency is starting a job in a new field). So, fellowship interview expenses could be considered a means to get a job in the same field (physician), assuming the government recognizes residency as a job and not strictly an educational thing (have to figure that one out).

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I guess the big question is does the government think that residency is an educational endeavor or a job? (I would think a job since i am getting a salary and am paying taxes). Also, does a specialty of IM count as a "new field" or is it a new job in same field?

Lastly, I actually don't have the actual receipts for my interview expenses (stupidly threw them away) but I can print out all of the credit card statements which show the charges.

will this work?

thanks for any advice...

 

[AndyFromMDTAXES]

My understanding of the rules is that one you begin working as a physician, that's your first job in that "trade or business". So any job related expenses you incur as of that point in time, including the expense to find a fellowship or specialty program, are all deductible to you - as long as you remain a practicing physician. Generally, a fellowship or specialty program doesn't represent a switch to a new trade or business.

If you ever get audited, having receipts to support your deduction is definitely helpful. Even so, if the only records you have is from your credit card statement, then make sure to keep those statement for at least 3 years.