Tests, Courses, and Application Fees: Tax Deductible?

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JVGeneration

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Hello,

First of all, I'd like to say that I did indeed use the search function to research this, but would like a more recent, in-depth conversation on this topic.

Are non-traditional applicants, as in individuals not claimed as a dependent by someone else, eligible to use application, MCAT, and prep course fees as an income tax write off?

Now, after reviewing the past posts and the few hits I got on google, the overwhelming answer is "no." However, the initial answer I came to on my own, is that these fees are indeed, deductible. Please tell me where the flaw in my argument is, if you find one.

First off, I'll be talking about the Lifetime Learning Credit. You can read about it at the IRS website: http://www.irs.gov/uac/Publication-970,-Tax-Benefits-for-Education-1

Second off, let's assume you are an eligible student for this credit. You may not be eligible. Check.

"For purposes of the lifetime learning credit, qualified education expenses are tuition and certain related expenses required for enrollment in a course at an eligible educational institution. The course must be either part of a post-secondary degree program or taken by the student to acquire or improve job skills."

Okay, so I think it's safe to say that we're all going to medical school to acquire a job. The use of the word course might seem awkward, because we're applying to a professional program, but arguable, any course we take in medical school is directly related to acquiring the job/improving job skills.



What are certain related expenses?

"Student-activity fees and expenses for course-related books, supplies, and equipment are included
in qualified education expenses only if the fees and expenses must be paid to the institution for enrollment
or attendance."


Yes, these fees are required. An easy way to think about this is that we cannot enroll/attend WITHOUT paying these fees. Therefore we know that they are indeed required to enroll/attend.


So, with that, I conclude that the application and test fees are indeed deductible.

Grey area:
can we deduct fees from all applications, or only the one from the institution we end up attending?

I'm not sure here. I think we might be pushing our luck trying to write off all of the application fees. However, in the wording, it never directly states that the required fees we pay for enrollment/attendance at a qualified institution must be paid to that institution. Rather, it says that the fees must be paid to an eligible educational institution. In other words, we could be paying fees to one eligible institution, for enrollment/attendance at another. Loop hole, anyone?

Unfortunately, these arguments do not apply to prep courses, UNLESS they are taught by a Title IV institution. Perhaps a Princeton Review course would qualify, if they're part of Princeton University? Otherwise, you might try searching for a review course taught by an university. Has anyone found any?


Other stipulations:
-Capped at $2000
-Fees must occur in the year you're filing. I.E. if you took the MCAT the fall before you applied, you probably cannot write the cost of the test off.

And I think I just thought of a big issue: Do we pay AMCAS the application fees? Does the money then get paid to the institution? Hm...

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What are certain related expenses?

"Student-activity fees and expenses for course-related books, supplies, and equipment are included
in qualified education expenses only if the fees and expenses must be paid to the institution for enrollment
or attendance.
"

Yes, these fees are required. An easy way to think about this is that we cannot enroll/attend WITHOUT paying these fees. Therefore we know that they are indeed required to enroll/attend.
So, with that, I conclude that the application and test fees are indeed deductible.
Grey area: can we deduct fees from all applications, or only the one from the institution we end up attending?
The AAMC is not an educational institution in this sense, so a definite no to MCAT and primary application fees.
With this logic I can see how you might make a case for the secondary fees and/or the deposits, but I imagine that would be a tough sell to the IRS.
Do we pay AMCAS the application fees? Does the money then get paid to the institution? Hm...
:thinking: If you don't know who you'd be paying your application fees to, then you obviously don't know all about the process yet.
Why don't you go read up on how to apply before trying to work out your taxes for 2 years down the road. And start saving while you're at it, cause deductible or not, you still have to fork over the dough up front.
 
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I deducted part of my fees on my taxes. I do not think I deducted all of them, but I did a fair amount. I did deduct my travel as I rearranged some business travel so there was overlap.
 
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I deducted part of my fees on my taxes. I do not think I deducted all of them, but I did a fair amount. I did deduct my travel as I rearranged some business travel so there was overlap.
The secondary fees?
 
:thinking: If you don't know who you'd be paying your application fees to, then you obviously don't know all about the process yet.
Why don't you go read up on how to apply before trying to work out your taxes for 2 years down the road. And start saving while you're at it, cause deductible or not, you still have to fork over the dough up front.

How about instead, we focus on the question I asked. I know how to apply - through AMCAS. Who said anything about two years down the road? I'm taking the test in 3 months. Perhaps I would only apply to the number of schools that I kept me under the $2000 that could be written off?

Quite condescending - hope you're aiming for surgery. Ya know, where you don't have to talk to patients?
 
Overreact much?

I did answer your question with the info I have; i.e. fees paid to AMCAS (for MCAT & primary app)=not deductible, fees paid to individual schools (secondary apps)=possibly deductible. And @familyaerospace chimed in with a personal anecdote potentially confirming this (edit:not confirmed).
If you're taking the MCAT in 3 months, then you're applying next cycle (per your signature), and would potentially need this info to do your taxes the following year; i.e. 2 years from now. And if you speculate whether AMCAS forwards fees to the individual schools (they don't) then you don't know all about the process, hence you clearly still have some reading to do.
 
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First a credit is not a deduction so you shouldn't merge the concepts. Second, the premed school tests, fees application costs are not deductible -- in general you can't call things like these a business expense as it represents a total change in professions, not an ordinary or necessary business expense in the same field. Third, while in school and residency most people don't earn enough to do itemized deduction anyhow. Fourth, rather than put together your (OP) own strained and contrived arguments as to why something SHOULD be deductible, you might want to do some research as to what the IRS has already issued rulings and regs on -- your suggestions aren't novel and there's already plenty of administrative guidance already out there from the horses mouth.
 
I have used the Lifetime Learning Credit toward my post-bacc courses but it's very specific in its stipulations. For example, you can't use it for textbook purchases unless the books are required (rather than just 'recommended' or because you think they would be helpful) and purchased from the college bookstore—not the bookstore across the street from the college, nor online.

It's definitely not meant to cover application expenses for preprofessional school. You're not enrolled in the institution (your future medical school) nor are you taking a course there, so it doesn't apply.

Assuming you're enrolled in a certificate-granting post-bacc program, you may be able to apply it toward your post-bacc tuition & fees.
 
The secondary fees?

I didn't pay secondary fees last year. I was on FAP. And this year, while I am not on FAP, others are paying for my secondaries so I am probably not going to be able to deduct the primary or secondary. I have to talk to an accountant about that part.

I did deduct my reduced MCAT fee because I own a business and I could justify it (just like I did GRE), used Lifetime learning to deal with the pre-reqs so that was the credit, deducted all or most of my books (business, sad but it all qualified), I deducted almost all my travel (business), I deducted my new suit and new clothing (business).

Please note, I am a small business owner so I have a few more options than individuals.
 
I have used the Lifetime Learning Credit toward my post-bacc courses but it's very specific in its stipulations. ...
Assuming you're enrolled in a certificate-granting post-bacc program, you may be able to apply it toward your post-bacc tuition & fees.
I have also done this with tuition.

Please note, I am a small business owner so I have a few more options than individuals.
That was kinda what I was thinking when you mentioned travel above, and you're right- a small business owner has a little more flexibility with these things. So your situation would not be applicable to the majority of people.

OP- between the previous 3 posts, do you feel like your question has been answered satisfactorily?
 
That was kinda what I was thinking when you mentioned travel above, and you're right- a small business owner has a little more flexibility with these things. So your situation would not be applicable to the majority of people.

A tax specialist would know if there is any way to deduct them for an individual. You just don't know unless you ask.

I have been called the itemizing expert. Drives my partner crazy. 🙂 I produce these incredibly detailed itemized spreadsheets. I will spend 80 hours or more just working on deductions and such.
 
A tax specialist would know if there is any way to deduct them for an individual. You just don't know unless you ask.

I have been called the itemizing expert. Drives my partner crazy. 🙂 I produce these incredibly detailed itemized spreadsheets. I will spend 80 hours or more just working on deductions and such.
Oh to be sure. But not necessarily a bunch of random strangers on the internet who don't have your whole financial picture in front of them 😉
 
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