Law School Discussion

Are LS application fees considered a tax writeoff?

Re: Are LS application fees considered a tax writeoff?
« Reply #30 on: September 15, 2004, 08:51:32 AM »
Turbotax is good tax software.  And I agree with beerandpretzels that you shouldn't take the advice of someone who may or may not be a CPA.  Instead, everyone should familiarize themselves with the rules before they take deductions that they are not sure qualify under the tax code.  The tax software is only as good as the numbers that you put into it.  Sure it will allow you to enter in expenses which are not deductible.

As I mentioned before, you can be as aggressive as you like when completing your taxes, or you can play by the rules.  Is it really worth the hassle of potentially dealing with the IRS over what will turn out to be small tax benefit ($2,000 of LSAT prep tuition will only yield a benefit of less than $300 to most people who are undergrad students right now).  In the end, though, it's your decision.  I just answered a tax question that was posed. 

nathanielmark

Re: Are LS application fees considered a tax writeoff?
« Reply #31 on: September 15, 2004, 08:54:42 AM »
but if the software allows you to make improper deductions, while maintaining honesty, that is the fault of the software.  as long as you have receipts for your deductions and can provide them to the IRS in the event of a highly unlikely audit, you are indeed playing by the rules.


Turbotax is good tax software.  And I agree with beerandpretzels that you shouldn't take the advice of someone who may or may not be a CPA.  Instead, everyone should familiarize themselves with the rules before they take deductions that they are not sure qualify under the tax code.  The tax software is only as good as the numbers that you put into it.  Sure it will allow you to enter in expenses which are not deductible.

As I mentioned before, you can be as aggressive as you like when completing your taxes, or you can play by the rules.  Is it really worth the hassle of potentially dealing with the IRS over what will turn out to be small tax benefit ($2,000 of LSAT prep tuition will only yield a benefit of less than $300 to most people who are undergrad students right now).  In the end, though, it's your decision.  I just answered a tax question that was posed. 


Re: Are LS application fees considered a tax writeoff?
« Reply #32 on: September 15, 2004, 09:00:32 AM »
The software is simply a glorified calculator.  It can't determine which deductions are proper and which are improper.  It is the inputer's job to determine which deductions are legit, not the software's.  Even if you have receipts for the LSAT, LSDAS, applications, etc., that does not change the fact that they are non-deductible expenses.

nathanielmark

Re: Are LS application fees considered a tax writeoff?
« Reply #33 on: September 15, 2004, 09:04:46 AM »
The software is simply a glorified calculator.  It can't determine which deductions are proper and which are improper.  It is the inputer's job to determine which deductions are legit, not the software's.  Even if you have receipts for the LSAT, LSDAS, applications, etc., that does not change the fact that they are non-deductible expenses.

you are making the assumption that the average american tax payer has advanced knowledge of tax law.  most people buy the software in order to give them proper guidance.  if the tax software is misleading, that is a fault of the softare company, not the user.

Re: Are LS application fees considered a tax writeoff?
« Reply #34 on: September 15, 2004, 09:26:47 AM »
I am making no such assumption.  When a person signs their tax return, he or she is making a representation that all of the information in the return is correct and accurate.  It is the taxpayer's responsibility, not the software company's.  Ignorance of tax laws is not a defense to filing an inaccurate return.  Just because people buy the software for the purpose of getting guidance does not alleviate their duty to perform due diligence when filling it out.  The IRS will come after the taxpayer, not the software company if the return is not filed correctly.

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Re: Are LS application fees considered a tax writeoff?
« Reply #35 on: September 15, 2004, 09:51:55 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.

I work in the legal dept of a company.  So that's the same field :)

Re: Are LS application fees considered a tax writeoff?
« Reply #36 on: September 15, 2004, 10:05:32 AM »
Pookie,

Then if you itemize your deductions, you can deduct the excess of those expenses over 2% of your Adjusted Gross Income.

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Re: Are LS application fees considered a tax writeoff?
« Reply #37 on: September 15, 2004, 10:09:41 AM »
I think that might still be a stretch :)  Anyway, I have no other deductions, so I'm doing an EZ form and taking the standard deductions.  I'll be much better off that way.  Thanks for the advice anyway!