Educational expenses are costly. It doesn’t matter if you’re a full-time or part-time accounting student or just starting out in your accounting career, paying for your education strains the bank accounts of many trying to make it to the other side of graduation or career goals.
Once you obtain your undergraduate degree, you then have to consider other costs associated with becoming a professional. Typically, paying for your education doesn’t end at graduation. The good news is that some of these educational expenses are tax-deductible.
Internal Revenue Service (IRS), Treasury Regulation 1.162-5: Expenses for Education
IRC § 162 and Treas. Reg. § 1.162-5 (a) General Rule states:
Expenditures made by an individual for education (including research undertaken as part of his [or her] educational program) which are not expenditures of a type described in paragraph (b) (2) or (3) of this section are deductible as ordinary and necessary business expenses (even though the education may lead to a degree) if the education—
(1) Maintains or improves skills required by the individual in his employment or other trade or business, or
(2) Meets the express requirements of the individual’s employer, or the requirements of applicable law or regulations imposed as a condition to the retention by the individual of an established employment relationship, status, or rate of compensation.
This means that educational expenses are deductible if they improve a person’s skills or are required for them to maintain employment, status, or pay level. The catch is that if you are deducting educational expenses, you must be able to show supportive documentation to the IRS that the educational expense is necessary to employment. Each situation is different and will be reviewed separately.
Get Started with a 7-Day Free Trial
Choosing a CPA Review course is a big investment of both time and money. Make sure you choose one that’s right for you. Try our course for free for 7 days, and you’ll experience the UWorld Roger CPA Review difference—where quality is what separates us from the rest.Learn More
CPA Review Course Expenses
If you have completed your undergraduate or graduate work in accounting and are considering becoming a CPA, you might want to know if CPA Review courses are tax-deductible. According to the two authoritative sources Rev. Rul. 69-292 and Glenn v. Commissioner 62 T.C. 270, CPA Review course costs are nondeductible as educational expenses or as an unreimbursed business expense. The IRS views becoming a CPA as starting a “new trade or profession” because CPAs can legally perform additional services that non-certified accountants can not.
Also, in the IRS Publication 970: Tax Benefits for Education, the IRS states that CPA study materials that are used to prepare for the CPA exam do not qualify as work-related study expenses or education. So the IRS and the court case determined that the cost of a CPA review course is a nondeductible, personal expense.
Benefits of Using a CPA Review Course
Even though CPA Review courses are not tax-deductible, it is still a good idea to use one if you plan on sitting for the CPA Exam. Overall, you end up saving money when using a CPA Review course. So, how does spending money on a CPA Review course end up saving you money?
It comes down to passing the CPA Exam. On average, around 50% of applicants actually pass every section of the CPA Exam on their first try. With UWorld Roger CPA Review, 94% of students pass their CPA Exams. If you decide to try the self-study method, there’s a 50% chance it will work out. There’s also a 50% chance it won’t – in which case you’ll have to pay to retake the exam that you didn’t pass the first time. Save yourself the time, trouble, and money by taking that chance down from 50% down to 9% with a UWorld Roger CPA Review course.