Law School Discussion

Are LS application fees considered a tax writeoff?

dr_draino

Re: Are LS application fees considered a tax writeoff?
« Reply #20 on: September 14, 2004, 08:59:45 PM »
My mother did not provide reference to tax code...I'd trust this reference...sorry.

I disagree with the above tax advice.  Under the rules for the Lifetime Learning Credit, the tuition must be paid "by a student or on behalf of a student to a qualified higher education institution" under Internal Revenue Code Section 25A(b)(3) and (f).

That same section defines a "qualified higher eduation institution" as "any postsecondary education institution elibible to participate in a student aid program administered under the Department of Education."

I do not believe that Testmasters or any other LSAT prep course is eligible for any such programs, and therefore, the test prep tuition would not be eligible for the Lifetime Learning Credit.

Re: Are LS application fees considered a tax writeoff?
« Reply #21 on: September 14, 2004, 10:00:06 PM »
The problem that trying to take this deduction raises is that in order to substantiate the tuition expenses claimed as a credit, you will need a Form 1099-T.  Universities provide them, but LSAT prep courses will not.  Of course, in the end, if anyone wants to be aggressive with their deductions or credits, they can, but the credit will not stand upon scrutiny by the IRS, and such an incident can prove to be a substantial barrier to admission to a bar.

TDPookie1

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Re: Are LS application fees considered a tax writeoff?
« Reply #22 on: September 14, 2004, 11:02:31 PM »
::waves goodbye to the tax writeoff::

swifty

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Re: Are LS application fees considered a tax writeoff?
« Reply #23 on: September 15, 2004, 03:16:37 AM »
If your only looking to write off your LSAC prep stuff, you'll need to reach the threshold amount of your already given stantard deduction.  Usually only people who deduct mortgage interest can get up to that amount.  But once you get there, then it really gets fun.  Takea look at form Schedule A from 1040.  Lots of cool stuff to deduct.  But you can't do it unless you have an amount of deductions more than your standard deduction.  I'm not a CPA, but I played one on TV, and I also worked for them. 

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Re: Are LS application fees considered a tax writeoff?
« Reply #24 on: September 15, 2004, 05:29:33 AM »
I'm not a CPA either, but I did stay at a Holiday Inn Express last night.

Re: Are LS application fees considered a tax writeoff?
« Reply #25 on: September 15, 2004, 06:53:14 AM »
These fees are not deductible on Schedule A of the 1040, either, even if you do itemize your deductions.  The fees do not qualify as 2% miscellaneous deductions because they qualify you for a new career.  If the fees were related to developing your career within your current field of employment, then they would be deductible.  However, the rules specifically state that if the expenditures qualify you for a new line of work, they are not deductible.

nathanielmark

Re: Are LS application fees considered a tax writeoff?
« Reply #26 on: September 15, 2004, 07:09:03 AM »
if you get a good tax software program, you can just answer the questions honestly and it should let you deduct lots of things.  its possible that when you get down to specifics, that the deduction is not actually allowed.  so if you are ever audited, you would have to pay the money back with interest.  but, since you are answering the question honestly, you can do so with a clean conscience.  and you stand to gain full write-off amount, while standing to lose only the interest rate charged by the IRS, less whatever interest rate you gain by keeping the money for that period of time.  plug in the probabilities of each outcome (being audited/not being audited) and you should get a very high NPV for deducting whatever you can fit into the mold of a good tax software program without comprimising your own integrity.  why take the advice of someone on a lawboard who may or may not be a CPA?  Just follow the tax software program.

i, for one, will be deducting LSDAS, app fees, LSAT prep stuff, LSAT fees, etc.

murkydreamer

Re: Are LS application fees considered a tax writeoff?
« Reply #27 on: September 15, 2004, 07:29:34 AM »
if you get a good tax software program, you can just answer the questions honestly and it should let you deduct lots of things.

On that note, what is a good tax software program?  Is there a particular one you recommend?  Ewww, taxes!  :P

nathanielmark

Re: Are LS application fees considered a tax writeoff?
« Reply #28 on: September 15, 2004, 08:13:48 AM »
if you get a good tax software program, you can just answer the questions honestly and it should let you deduct lots of things.

On that note, what is a good tax software program?  Is there a particular one you recommend?  Ewww, taxes!  :P

i like turbotax.  just read up on the different versions and get the cheapest one you need.  the expensive ones are really not necessary unless you are in retirement or have major investment issues.

newy

Re: Are LS application fees considered a tax writeoff?
« Reply #29 on: September 15, 2004, 08:43:55 AM »
I concur... TurboTax all the way. (you can get it at Costco)  I have my own business and I did my taxes all by myself this year.