Section 1.162-5(b)(1)

Deducting Graduate School Expenses When You’re A Student

For full-time students attending graduate school, tuition and costs are exorbitantly high. It’s often difficult to maintain studies and still work to help defer some of the costs. For those who have not yet entered the professional workplace, is it possible to obtain any tax benefits for graduate school expenses? Is tuition for law or graduate school a deductible educational expense?

Deducting Graduate School Expenses When You’re Already Employed

Graduate students may deduct the costs of tuition and other fees under most circumstances. But what if an individual decides to go back to school after he or she has already entered the workforce, what, if any, tuition, costs, and fees are deductible?

Taxpayers may deduct the costs of qualifying work-related education as a business expense when the education leads to a degree, but only if at least one of the following two tests is met:

  • The education is required by an employer or by law to maintain present salary, status or employment. The required education must serve a bona fide business purpose of a taxpayer’s employer.

Can I Deduct My Law School Tuition?

Many professionals, whether lawyers, accountants or physicians, experience and endure difficult economic times before finally earning their graduate degree. On one hand, the high cost of tuition must be paid, which requires either a significant student loan or form of employment. Yet, graduate school leaves little or no time for anything other than study. After such an economically, physically, and mentally draining ordeal, is there a way to recoup some of the blood, sweat and cash exchanged for a graduate degree? Is tuition for law or graduate school a deductible educational expense?

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