Q: Can two companies pay for the same education

What kind of business does she operate and how are any of the courses within the mba program related to her business?

ChEAr$, Harlan Lunsford, EA n LA

I think you are in safe waters, as long as the two funding sources are not paying for the same expenses. That would be double-dipping. I'm not so sure that paying the educational expenses of the 'sole proprietor' is a legitimate business expense, unless that perk is also offered to employees under a defined plan. The money expended is, after all, owned by the proprietor and there are plenty of educational deductions and credits that can be claimed on her individual return.

Business consulting for IT: writing/reviewing business plans, marketing IT services.

This is not a perk -- this is business expense under Sec 162 since it satisfies the 4 criteria for work related education. Also, publication 970 says that

"If you are self-employed, you deduct your expenses for qualifying work-related education directly from your self-employment income. This reduces the amount of your income subject to both income tax and self-employment tax."

True, but they all have income cap, which is not that high

Okay, but remember any business deduction as self employed must be for a particular course appropriate in her business; not the MBA program in toto, or "half toto?" If she takes marketing or planning courses as part of the program, then yes; a course in capital markets or investing would not qualify. Holiday ChEAr$, Harlan Lunsford, EA n LA

Not in the situation you've outlined.

The S/P would not be eligible because of the ownership issue

- too much of the benefits are accrueing to the owner. If she owns the corporation that would also disqualify the corporation as well. I'd love to be able to pay for my son's college thru my own C-Corp.

Rgs,

Mark