Novel plan for claiming med school as business expense???

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Runtita

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This isn't a joke, and I certainly wouldn't want to do anything illegal or dishonest, but would it be possible to start your own business, then to claim your educational expenses as business expenses? And would this benefit you financially?

Say I start up a business..."Runtita, DO"... Could I somehow claim my med school expenses as business expenses? And if this is legal, why doesn't everyone do it?

I have a suspicion that this is not above board...


All of this is hypothetical, of course.
 

edmadison

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Originally posted by Runtita
This isn't a joke, and I certainly wouldn't want to do anything illegal or dishonest, but would it be possible to start your own business, then to claim your educational expenses as business expenses? And would this benefit you financially?

Say I start up a business..."Runtita, DO"... Could I somehow claim my med school expenses as business expenses? And if this is legal, why doesn't everyone do it?

I have a suspicion that this is not above board...


All of this is hypothetical, of course.

Won't work for several reasons. From the IRS web site:
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Q.3. May an employee receive tax-free educational assistance from the employer to attend graduate school?

A.3. In general, no. However, employers can provide job-related educational assistance for graduate-level education as a tax-free fringe benefit under certain circumstances. Educational assistance would generally qualify as job-related if it maintains or improves skills required for the employee's current job or satisfies certain express employer-imposed conditions for continued employment. Individuals should consult a tax advisor for help in determining the tax treatment of any assistance the individual may be receiving from an employer for graduate-level education.
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The tax code is clear about "maintains and improves skills...". It states that if the education qualifies you for a new profession (law, medicine, et al.) rather than improve skills (MBA for a banker) it's not tax free. Thus if an employer did this, they would have to pay income tax on the benefit. You'd also have to figure out a way to get 30K+ in income into the business, so that it could give you the benefit (I have no idea if the business can deduct the educational payment either).

Ed
 
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