Employee Business Expenses for Doctorate program??

Question

I have a client that is working as an employee for a physical theapy clinic. She is a PT, single and has gross income this year of over 110K. She went back to school to get her Doctor of Physical Theapy (DPT), and incurred about

11K in qualified educations expenses as reported on 1098T. She also incurred about 1K of student loan interest. The taxpayer's AGI is too high to take any above the line deductions for the education expenses or the student loan expenses. However, it appears to me the client could take all 12K as an itemized deduction, as an employee business expense subject to the 2% limit. Does anyone have any experience with a working PT getting their DPT and being able to deduct the qualified education expenses and student loan interest? Thank You......Marie

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mmurrell · Accepted Answer

I am placing this back in the que to see if I can get a nibble. I know of the four requirements of deductibility, i.e. EITHER

The education maintains or improves skills required of the job........YES in this case because she is a P.T. working on P.T. things.
The education meets express requirements needed to retain the job/ pay/position......NO AND
The education is NOT necessary to meet the minimum education requirements of the job....TRUE she is already working as a P.T.
The education does NOT qualify the taxpayer for a new trade or business.....This is the one I just don't know about. This education will give her a Doctorate of Physical Therapy. She would still be doing P.T. work. She is not changing jobs. She could however become more involved in the management side. I really believe this has come up a number of times, I am just having trouble finding a court case. Any help will be appreciated. Marie

Stuart A. Bronstein · Answer

All I can say is that if she were on a schedule C the cost should be deductible as an ordinary and necessary business expense. But I don't know if the rules are the same for an unreimbursed employee business expense. Stu

Employee Business Expenses for Doctorate program??

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