Can I deduct MBA tuition as business expense? I had full time job 21 months before starting MBA and I am still in the same position. MBA helps improve my skills in my job

I searched for 2106 then entered my entire tuition for 2016 into education expense. I am a pharmacist and MBA improves my skills in pharmacy operation. If I enter my tuition in 2106, then do I delete the 1098T?


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If you itemize your deductions in order to claim your education expenses, then yes, you will need to delete your 1098T form from the education section of Turbo Tax and then answer the work related education expenses in the itemized deductions section of Turbo Tax. 

However, there are several options. You might qualify for the Lifetime Learning Credit, the tuition and fees deduction, or you might be able to take your expenses as an itemized deduction, if you qualify for the deduction and you qualify to itemize.

Please refer to the IRS resource under the heading, "business deduction for work related education" to learn more about taking an itemized deduction. Additionally, please refer to pages 67-71 under the heading, "business deduction for work related education" if you want to review the requirements in more detail.   

To itemize your deductions, you would have to have personal expenses such as medical and dental expenses, mortgage interest, real estate taxes, unreimbursed job expenses and certain miscellaneous expenses, and charitable contributions that when combined together, total more than your standard deduction. For example if you file single, your standard deduction is $6300 so you would have to have personal expenses that total more than $6300.

With respect to the tuition and fees deduction, you dont have to itemize your deductions in order to claim this benefit. However, there are some restrictions. You cant take the deduction if your status is married filing separately. There are also modified adjusted gross income limitations. If your status is married filing jointly, modified adjusted gross income limitation is $160,000. For all other filing statuses, modified adjusted gross income limitation is $80,000. Please refer to page 2 of IRS instructions under the heading, "who can take the deduction".

With respect to the Lifetime Learning Credit, it depends on your filing status because there is a limit on modified adjusted gross income. If you are married filing jointly, then the limit for modified adjusted gross income is $130,000. For all other filing statuses, the limit is $65,000. If your status is married filing separately then you cant take the credit. Please refer to the following FAQs to learn more about the Lifetime Learning Credit. 

You are eligible to claim the Lifetime Learning Credit if all of the following requirements are met:

  • You (or your dependent or a third party) paid qualified education expenses for higher education.
  • You paid the education expenses for an eligible student.
  • The eligible student is you, your spouse, or a dependent you claim an exemption for on your tax return.
  • Your modified adjusted gross income is less than $66,000($132,000 if you are married filing jointly).
  • The credit is reduced between $56,000 and $66,000 ($112,000 and $132,000).

One of the advantages of the Lifetime Learning Credit is that you can take the credit every year for higher education as long as you meet the qualifying requirements.



Generally, if you paid for qualified education expenses for an academic period beginning in the year or in the first three months of the next year then you are allowed to take the Lifetime Learning Credit.

Qualified expenses are tuition and certain related expenses required for enrollment at an eligible institution. The course must be either part of a post secondary degree program or taken by the student to acquire or improve job skills.

Student activity fees and expenses for course-related books, supplies, and equipment are included in qualified education expenses only if the fees and expenses are paid to the institution as a condition of enrollment or attendance.

The maximum Lifetime Learning Credit you can claim in a year is 20% of the first $10,000 of qualified education expenses you paid for all eligible students (or up to $2,000). The credit is reduced (phased out) if your modified adjusted gross income (MAGI) is between $56,000 and $66,000 ($112,000 to $132,000 if married filing jointly). Since this is not a refundable credit, the credit can't be more than your tax liability.


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