I worked until Sept (made 95k) and then became a full-time student. Should I buy a computer to reduce my taxable W2 2016 income? Or wait until 2017 (I'll earn much less)?

[zoiesmith1975]

I worked until Sept (made 95k) and then moved to a new town and enrolled as a full-time student. It's Dec 31st tomorrow and the last day to take any take write-offs. Should I buy a computer to reduce my taxable W2 2016 income? Is that even possible? I don't have a schedule C this year. 

My other option is to wait until 2017 when I'll be earning much less and would qualify for the Education Credit. 

If I can deduct the computer of my taxable 2016 income, I'd prefer that. I'll find more things to deduct off the 2-4k Education Credit for 2017.

Thank you

[SweetieJean]

Are you a graduate student?

[zoiesmith1975]

Yes.

[zoiesmith1975]

Thank you. I saw that link. I suppose I wanted more detail about deducting from my W2. In the past I've only been able to deduct from my schedule C - which I don't have for 2016.

[zoiesmith1975]

The computer is required though. I have a computer but it's time to upgrade. Also if it helps lower my taxable 2016 income, that's my goal.

[SweetieJean]

As a graduate student, you do not qualify for the American Opportunity Credit, so see the reference in that link to Lifetime Learning Credit. I've also seen references that you cannot deduct a computer for school if the school has a computer lab for you to use.

[zoiesmith1975]

Oh I did not know that about the American Opportunity Credit. I think I might still qualify for the The Lifetime Learning Credit and the The Tuition and Fees Deduction. I'm not sure about the computer lab rule. I'll look into it. It's bunk though! They are cramped, loud, badly lit, don't have the software I use, and close at night when I'm up writing papers.

[SweetieJean]

For 2016, the American opportunity credit, lifetime learning credit, and tuition and fees deduction will not be allowed unless the student receives a Form 1098-T from an eligible educational institution.

[zoiesmith1975]

OK - based on some other answers and the software not being on them - even though there's a computer lab I think I'm ok.

The question still remains though - since I definitely do not qualify for any tax breaks this year, can I deduct the computer off my W2 earnings for this 2016 calendar year?

[SweetieJean]

This may be helpful:
<a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/p970.pdf">https://www.irs.gov/pub/irs-pdf/p970.pdf</a>

[SweetieJean]

You cannot take it as an employee business expense, since you did not own/use it while you were working.

[zoiesmith1975]

Thank you. Yes, I do not qualify for any educational tax break this year - but again - 2016 is the year I want to reduce my taxable income. So that's the question.

[zoiesmith1975]

Yes, I understand about not taking it as an employee business expense - but can I still deduct it from my W2 because I went to school and it was required?

[zoiesmith1975]

Or can I deduct it as a loss on a schedule C?

[TaxGuyBill · Accepted solution]

Yes, I understand about not taking it as an employee business expense - but can I still deduct it from my W2 because I went to school and it was required?

No.

• You are not self employed, so you can't use Schedule C.
• You said you don't qualify for Educational Credits, so the computer won't go towards that.
• You seem to have indicated it is NOT used for your W-2 job (only for school), so it is not an Unreimbursed Employee Expense.
• It doesn't seem to be a work-education expense (you quit your job).  Even if it was, it is first prorated based on personal use and work-education use.  Then the deduction is in the category that is limited to the amount over 2% of your income which will almost positively eliminate the deduction.  It would further be reduced or eliminated if you don't otherwise Itemize your deductions on Schedule A.
  
• There are no other options for deducting a computer.