I think I qualify to deduct my eMBA tuition as a business expense, do I enter the amount of tuition total, or minus what my employer reimbursed, and/or minus 2% AGI?

[nerfgirl]

I do not qualify for the usual tuition credits due to my income, but after doing some reading, including on the IRS website, I believe I qualify to deduct my executive MBA tuition as a business expense. I'm not sure what to enter in the box in turbo tax however. Do I put the total cost of tuition? Tuition minus employer reimbursement? Tuition minus 2% AGI? I'm not certain what calculations I need to do and what turbo tax will do for me. Thanks.

[Fern · Accepted solution]

Enter both pieces, tuition paid and reimbursement received.  The Turbo Tax program will calculate the 2% adjustment.

Enter your education expenses in the Employment Expenses of Turbo Tax under Job-related Expenses. Report them as education expenses.  Use the gross amount you paid for tuition.  A few screens later, you will enter the reimbursement you received.

The IRS allows including tuition expense as a business expense if you meet the requirements.  IRS Publication 970 states "You can deduct the costs of qualifying work-related education as business expenses. This is education that meets at least one of the following two tests.

-The education is required by your employer or the law to keep your present salary, status, or job. The required education must serve a bona fide business purpose of your employer.
-The education maintains or improves skills needed in your present work.

However, even if the education meets one or both of the above tests, it isn't qualifying work-related education if it:

-Is needed to meet the minimum educational requirements of your present trade or business, or
-Is part of a program of study that will qualify you for a new trade or business.

You can deduct the costs of qualifying work-related education as a business expense even if the education could lead to a degree."