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Level 1
posted Mar 10, 2022 5:47:06 AM

Can I write off edu. expenses as self-employed deduction funded by a non-taxed scholarship?

I have a side gig, and I'm enrolling in a Master's program related to that line of work, so I know theoretically I can write off my tuition as a deduction. I've also received a big scholarship, part of which I will use for tuition (non-taxed) and part of which I will use for living expenses (taxable). Even though I'm using a scholarship to pay my tuition, can I still write the tuition off as a deduction to my side business, or can I only write it of if it's funded by taxable income?

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2 Replies
Expert Alumni
Mar 10, 2022 5:58:17 AM

No, you cannot deduct as a business expense the tuition financed by your scholarship. That would be double-dipping.

Level 15
Mar 10, 2022 6:50:46 AM

Depending on the conditions of the scholarship, you may want to declare more of the scholarship as taxable, so that you can take the business deduction (or claim the tuition credit).  If the scholarship is restricted (it must be used for tuition) you cannot use this gimmick.