I am helping my daughter with her 2023 taxes. The first half of the year, she was still in dental school. In order to graduate, she had to pay for some patients' dental expenses to meet the requirements for her graduation. Are these expenses deductible as qualified education expenses? Also, she had to pay for mock board materials such as mock teeth and fake jaws required by her school for a practice board exam needed for a grade in one of her courses. Are these deductible as well?
None of those expenses would qualify for an education credit (there is no deductions for education expenses.
Graduate students are only eligible for the Lifetime Learning Credit(LLC) which is less generous and include fewer expenses that the American Opportunity Credit (AOC). The LLC is only good for Tuition and fees that go in box 1 of the 1098-T. Unlike, the AOC, course materials do not qualify.
Only if the expenses were required for enrollment but not for graduation. Pub 970 states: For purposes of the lifetime learning credit, qualified education expenses are tuition and certain related expenses required for enrollment in a course at an eligible educational institution. The course must be either part of a postsecondary degree program or taken by the student to acquire or improve job skills.
Thanks for pointing me to publication 970. Within the publication, it had this example:
Example 1.
Jackson is a sophomore in University V's degree program in dentistry. This year, in addition to tuition, Jackson is required to pay a fee to the university for the rental of the dental equipment that will be used in this program. Because the equipment rental fee must be paid to University V for enrollment and attendance, the equipment rental fee is a qualified expense.
It seems like the materials my daughter paid to the dental school for the practice board items needed for a grade in that specific class would qualify. Do you agree?