Tax in Action: Practical Strategies for Tax Pros

The Knowledge Economy Tax Trap: When Education Costs Aren't Deductible

Listen Later

Jeremy breaks down the complex world of work-related education tax benefits, revealing why most educational expenses aren't as deductible as business owners think. He explains the stark difference between limited educational assistance programs that cap benefits at $5,250 annually and business expense deductions that often get rejected by the IRS for qualifying taxpayers for "new trades or businesses." Through real tax court cases involving everyone from IRS agents trying to deduct law school to nurses upgrading their licenses, this episode exposes the narrow window where education costs actually qualify as legitimate business deductions.

Sponsors
SafeSend - taxshow.promo/safesend


  • (00:00) - Introduction: The Knowledge Economy
  • (01:00) - General Education Tax Benefits
  • (04:20) - Business Owner Education Questions
  • (05:20) - Two Main Approaches for Business Education Benefits
  • (08:20) - Educational Assistance Programs Deep Dive
  • (14:20) - Program Limitations and Restrictions
  • (23:55) - What Educational Assistance Programs Cover
  • (28:15) - Substantiation and Double Benefit Rules
  • (31:55) - Business Expense Deduction Alternative
  • (34:35) - Qualifying Education Expenses
  • (39:15) - Non-Deductible Education: Two Key Exceptions
  • (42:35) - Established in Trade or Business Requirement
  • (45:55) - Law Degrees and New Trade or Business
  • (49:35) - Professional Certifications as New Trade or Business
  • (51:15) - MBA Programs: Split Tax Court Decisions
  • (54:15) - Final Warnings and Best Practices

    • Connect with Jeremy
    https://www.linkedin.com/in/jwellstax
    https://www.steadfastbookkeeping.com

    Subscribe on YouTube
    https://www.youtube.com/@TaxinAction

    Earn CPE for Listening to This Podcast
    https://www.earmark.app/

    This podcast is a production of the Earmark Media

    ...more
    View all episodesView all episodes
    Download on the App Store
    Tax in Action: Practical Strategies for Tax ProsBy Jeremy Wells, EA, CPA
    • 4.9
    • 4.9
    • 4.9
    • 4.9
    • 4.9

    4.9

    14 ratings

    More shows like Tax in Action: Practical Strategies for Tax Pros

    View all
    Planet Money by NPR

    Planet Money

    30,795 Listeners

    Main Street Business by Mark J Kohler and Mat Sorensen

    Main Street Business

    576 Listeners

    Tax Smart Real Estate Investors Podcast by Hall CPA

    Tax Smart Real Estate Investors Podcast

    425 Listeners

    The Accounting Podcast by Blake Oliver & David Leary

    The Accounting Podcast

    333 Listeners

    The Indicator from Planet Money by NPR

    The Indicator from Planet Money

    9,559 Listeners

    Small Business Tax Savings Podcast by Mike Jesowshek, CPA

    Small Business Tax Savings Podcast

    260 Listeners

    Building the Premier Accounting Firm by Roger Knecht

    Building the Premier Accounting Firm

    17 Listeners

    The Ezra Klein Show by New York Times Opinion

    The Ezra Klein Show

    16,010 Listeners

    The Weekly Show with Jon Stewart by Comedy Central

    The Weekly Show with Jon Stewart

    10,619 Listeners

    Earmark Podcast | Earn Free Accounting CPE by Blake Oliver, CPA

    Earmark Podcast | Earn Free Accounting CPE

    26 Listeners

    Oh My Fraud by Caleb Newquist

    Oh My Fraud

    141 Listeners

    Tax Chats by Dyreng and Hoopes

    Tax Chats

    38 Listeners

    Unofficial QuickBooks Accountants Podcast by Alicia Katz Pollock, MAT

    Unofficial QuickBooks Accountants Podcast

    44 Listeners

    Federal Tax Updates by Roger Harris, EA and Annie Schwab, CPA

    Federal Tax Updates

    35 Listeners

    The Mr. R Show by Chris Picciurro and John Tripolsky

    The Mr. R Show

    0 Listeners