Question

Samantha, who is single and has MAGI of $58,950, wass recently employed by an accounting firm. During the year, she spends $3,000 for a CPA exam review course and begins working on a law degree in night school. Her law school expenses were $4,590 for tuition and $900 for books (which are not a requirement for enrollment in the course). Click here to access Exhibit 9.1. If an amount is zero, enter "0" a. Assuming no reimbursement, how much can Samantha deduct for the CPA exam review course? b. Assuming no reimbursement, how much can Samantha deduct for the Law school expenses?

Answer 1

Information Given -

Samantha, who is single and has MAGI of $58950.

During the year, she spends $3,000 for a CPA exam review course.

Her law school expenses were $4590 for tuition and $900 for books (which are not a requirement for enrollment in the course).

.

Answer - Part - (a) -

Qualified expenses are amounts paid for tuition, fees and other related expense for an eligible student that are required for enrollment or attendance at an eligible educational institution.

Amount paid for CPA exam review course are non-deductible as per federal income tax law.

In the given case, Samantha had paid $3000 for CPA exam review course and it is not Qualified education expense.

Therefore, Samantha can deduct for the CPA exam review course =

$0

.

Answer - Part - (b) -

Qualified expenses are amounts paid for tuition, fees and other related expense for an eligible student that are required for enrollment or attendance at an eligible educational institution.

In the given case, Samantha had paid $4590 for tuition and $900 for books (which are not a requirement for enrollment in the course).

So, the amount paid of $4590 for tuition is a Qualified education expense and amount paid of $900 for books is not Qualified education expense.

For Single tax payers, having Modified adjusted gross income up to $65000, then Qualified tuition deduction is allowed for maximum $4000.

Therefore, Samantha can deduct for the Law school expenses =

$4000