Tax Research Memorandum - Reimbursement for the Cost of the Cpa Review Course
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Tax Research Memorandum
To: Benjamin Jones
From: Tax Accountant, CPA
Date: June 23, 2014
Re: CPA Review Course Cost Deduction
Facts
You are a new staff accountant for Local Firm CPAs, LLC. You are taking a CPA review course to help you prepare for the exam. However, you are not reimbursed for the cost of the course although your firm expect of you to both take the CPA exam and to pass it. You would like to deduct the cost of the CPA Review Course on your federal income tax return for the year.
Issue
The issue is whether you are able to deduct the cost of the CPA Review Course on your federal income.
Rule
You may deduct work related education as a business expense on your federal tax return as long as it meets one of the following criteria. 1. Your employer requires the education to keep your current job, salary or status. Moreover, the required education must serve as a bona fide business purpose for the employer. 2. The education will improve or maintain your skills at your current job. However, the education will not qualify as a business expense if it is needed to meet the minimum requirements for your current work or will qualify you for a new trade or business.
Analysis
IRS Publication 970 states that you are allowed to deduct educational expenses on your federal tax return if the expense is for a higher education. Furthermore, for a deduction to qualify as a work-related expense it must meet following criteria. 1. The law or your current employer requires the education to keep your current job, salary or status. Moreover, the required education must serve as a bona fide business purpose for the employer. 2. The education will improve or maintain your needed skills at your current job. However, the education will not qualify as a business expense if it is needed to meet the minimum requirements for your current work or will qualify you for a new trade or business. Taking the certified public accountant (CPA) exam and successfully...
To: Benjamin Jones
From: Tax Accountant, CPA
Date: June 23, 2014
Re: CPA Review Course Cost Deduction
Facts
You are a new staff accountant for Local Firm CPAs, LLC. You are taking a CPA review course to help you prepare for the exam. However, you are not reimbursed for the cost of the course although your firm expect of you to both take the CPA exam and to pass it. You would like to deduct the cost of the CPA Review Course on your federal income tax return for the year.
Issue
The issue is whether you are able to deduct the cost of the CPA Review Course on your federal income.
Rule
You may deduct work related education as a business expense on your federal tax return as long as it meets one of the following criteria. 1. Your employer requires the education to keep your current job, salary or status. Moreover, the required education must serve as a bona fide business purpose for the employer. 2. The education will improve or maintain your skills at your current job. However, the education will not qualify as a business expense if it is needed to meet the minimum requirements for your current work or will qualify you for a new trade or business.
Analysis
IRS Publication 970 states that you are allowed to deduct educational expenses on your federal tax return if the expense is for a higher education. Furthermore, for a deduction to qualify as a work-related expense it must meet following criteria. 1. The law or your current employer requires the education to keep your current job, salary or status. Moreover, the required education must serve as a bona fide business purpose for the employer. 2. The education will improve or maintain your needed skills at your current job. However, the education will not qualify as a business expense if it is needed to meet the minimum requirements for your current work or will qualify you for a new trade or business. Taking the certified public accountant (CPA) exam and successfully...