If my parents paid for my professional license, can i deduct on my return if i am no longer a dependent on their return?

[Hal_Al · Accepted solution]

Yes. The payment is considered a gift from your parents to you. So you can treat the moneys as if you paid it directly.

If you are a regular W-2 employee (as opposed to being self employed), your ability to deduct job expenses is limited. You are allowed to deduct your  job expenses, subtracting what you were reimbursed (do not subtract your reimbursement if it was included on your W-2 as taxable income). TurboTax completes form  2106, which  then carries to Misc itemized deductions on Schedule A. The problem with this is that you only get to deduct that portion of  your misc deductions that exceed 2% of your AGI. and then only if your total  itemized deductions exceed the standard deduction.  (2% rule explained: https://ttlc.intuit.com/questions/2902781-what-is-the-2-rule)

  In TurboTax, enter at:

Federal Taxes Tab

Deductions & Credits

-Scroll down to:

-Employment Expenses
-- Job related expenses

There's one other thing you need to be aware of; the cost of your initial license is usually NOT deductible. Any annoual renewals, to keep your license, is deductible. The rationale goes like this: the cost (education & licensing) to enter a NEW profession is not deductible. The cost to stay in your existing profession is.