Can I deduct part time mba expenses as part of Un-reimbursed Employee Expenses and Lifetime Learning credit simultaneously

[talk_to_deba]

I am studying in a part time MBA program while working Full time paying around 20K in tuition and 3k in other expenses and fees. I understand that I can deduct the 20K expenses as part of Unreimbursed Employee expenses (form 2106-EZ) in my itemized deduction . Can the same expense be applied towards Lifetime Learning Credit ($2000 tax refund) . As I noted, the Lifetime learning credit does not care about the Exact amount . Rather it can be applied once any money is spent towards higher degree. Please advise

[Hal_Al]

No. You cannot double dip.

But you can do both. The first $10,000 of expenses qualifies you for the LLC and any excess can be claimed as employment expense.

[talk_to_deba]

In other words , if I have an educational expense of say 30K then I may put 10K in lifetime learning credit and 20K in Un-reimbursed Employment expense(if that helps my tax numbers) , instead of putting all 30K in Employment Expense. Is that correct ?

[Hal_Al]

That is correct.

The general rule is: Educational expenses to improve your current job skills are deductible. But learning a new job is not. From JK Lasser’s Your Income Tax 2013, pg 580: "For a deduction, the courses must be related to your existing job responsibilities and not lead to qualification for a new business. The tax court has allowed deductions for MBA expenses where individuals with some managerial or administrative experience took the courses to improve skills needed for their existing jobs."
<a rel="nofollow" target="_blank" href="http://www.forbes.com/sites/mattsymonds/2014/04/11/the-mba-and-the-taxman-claim-or-not-claim/#4e857f...> Excellent article on deducting MBA
<a rel="nofollow" target="_blank" href="http://www.wsj.com/articles/good-news-for-m-b-a-students-tuition-is-now-more-deductible-1471013805">...> Recent (2016) court ruling

[dbamba]

In case this is still active, what if the mba tuition is a business expense. Would you be able to "double dip" or would you still need to split it up? 

Thanks!

[BarbaraW22]

No, you cannot use the same education expenses for both the Lifetime Learning Credit and as a deduction for your business. The Lifetime Learning Credit allows for a credit of up to $2,000 on the first $10,000 of qualified education expenses. If your education expenses exceeded $10,000, you could deduct the remaining expenses as a business expense on a Schedule C.

Or if it provides a greater benefit, you could deduct the entire education expense as a business expense if the expense meets the following criteria:

• The education is required by your employer or the law to keep your present salary, status, or job. 
• The education maintains or improves skills needed in your present work.

However, education expenses that are needed to meet the minimum educational requirements of your present trade or business, or are part of a program of study that will qualify you for a new trade or business are not deductible business expenses. Please see page 66 of this link to Publication 970 for more information.

Another important fact is unreimbursed employee business expenses are no longer deductible unless you are in one of the following categories of employment:

• Armed Forces reservists
• Qualified performing artists
• Fee-basis state or local government officials
• Employees with impairment-related work expenses

Please click on this TurboTax article for more information.

@dbamba