[newtocpa6453]

Asking for a friend… cost of studying + sitting for the exam tax deductible?

[Missy]

Generally no unless the prep class is through a college program. Exam fees are never deductible.

Licensed Massachusetts Non Reporting CPA since 2012
Finance/Admin/HR Manager

[Anonymous]

If you buy a review course, I *think* you can get away with counting it as a “tuition and fees” deduction. If you enroll at, for instance, the Becker review program offered on a college campus, you can definitely count it. Purchasing Becker (or Roger or any others) online – I've known of people who have done that and were never questioned about it. I think the justification is “It prepared me for a better job”. Exam fees, definitely not. State board fees, definitely not.

[Accountant183748]

It is my understanding that you cannot deduct anything related to the CPA for tax purposes – this includes additional classes needed to meet the 150 rule or any other credits.

https://www.forbes.com/sites/anthonynitti/2016/12/21/tax-geek-wednesday-deductibility-of-professional-education-expenses/#6f6f48474fc4

CPA Review Courses

In Revenue Ruling 69-292, the IRS concluded that the cost of a CPA review course is a nondeductible, personal expense. The Revenue Ruling draws a parallel to example 3 of Regulation Section 1.162-5(b)(iii), which denies a deduction for a bar review course to a lawyer:

E, who has completed 2 years of a normal 3-year law school course leading to a bachelor of laws degree (LL.B.), is hired by a law firm to do legal research and perform other functions on a full-time basis. As a condition to continued employment, E is required to obtain an LL.B. and pass the State bar examination. E completes his law school education by attending night law school, and he takes a bar review course in order to prepare for the State bar examination. The law courses and bar review course constitute education required to meet the minimum educational requirements for qualification in E's trade or business and, thus, the expenditures for such courses are not deductible.

In addition, the courts have held (see Cooper) that the business of being a CPA is fundamentally different from that of a non-CPA; thus, the expenses for a CPA review course are not deductible under test #4, as the education prepares you for a new trade or business.

Classes Necessary to Meet the 150-hour CPA requirement

Around 15 years ago, most states added another hurdle to the CPA licensing process by requiring applicants to have 150 credits for AICPA membership. Unfortunately, most bachelor's degrees require only 120 credits, meaning it became fairly standard for a college graduate to accept an accounting job, sit for the exam, and then start cranking out additional credits in Music Appreciation at the local community college in an effort to reach the 150-hour requirement.

As stated above, the courts have held that the trade or business of being a CPA is fundamentally different from that of a non-CPA. As a result, the expenses for the additional 30 credits are not deductible, because they prepare or qualify you for a new trade or business; that of being a fully-licensed CPA.

[Tncincy]

We better get it right, this might be a test question. Cpa exam fees and courses are NOT tax deductible. A miscellaneous expense necessary to keep your job is quit different. But we're not keeping a cpa job if we're not cpa's yet… Education expenses are for students enrolled in a college or university and I think a 1098 t statement is required to receive credit.

It begins with a 75
Been here too long as a cheerleader....ready to pass

[ragepsn29]

I second @tncincy. How about CPE fees? Just in case I have to pay out of my own pocket lol

AUD - 65, 72, 70, 74, 81
FAR - 66, 71, 76
REG - 69
BEC - 80

[Earla Riopel (NYCARE)]

As a Canadian US CPA candidate, I can. Related info: (1) As per TurboTax: https://turbotax.intuit.ca/tips/examination-fees-as-a-tuition-expense-5598 & (2) As per CRA: https://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s1/f2/s1-f2-c2-eng.html

As for American resident US CPA candidates and for CPA exam purposes, likely you can't. However, depending on your circumstances, maybe. Please see IRS: https://www.irs.gov/publications/p17/ch27.html

[studysled]

CPE costs and AICPA fees are deductible if not reimbursed by employer. CPA Exam Prep Course and Exam fees are generally not, although there is some case law that says they are.

[Pete]

First off, the CPA is definitely not deductible. Many years ago, my professor, who worked for the IRS (to bring suits against people, told us that taking the CPA exam is considered “a change of career,” which is stupid; however, training items related to a career change aren't deductible. I could be slightly off about that explanation, but it revolves around the explanation (also backed up by the statement above).

“CPE costs and AICPA fees are deductible if not reimbursed by employer.”
-True, but there are so many hurdles for this (ie. 2% of income) that you likely won't get any benefit from this.

“Around 15 years ago, most states added another hurdle to the CPA licensing process by requiring applicants to have 150 credits for AICPA membership. Unfortunately, most bachelor's degrees require only 120 credits, meaning it became fairly standard for a college graduate to accept an accounting job, sit for the exam, and then start cranking out additional credits in Music Appreciation at the local community college in an effort to reach the 150-hour requirement.”
-Couldn't you argue that these classes were a necessary element of employment though, since most CPA firms will not retain you, unless you complete the 150 credit hours? I know the BIG 4 firms around here will not retain you more than 6 months without said credits.

B=84 This exam was such a b**** that I thought I failed-don't know how these things work
A=76 Slacker I am, I'll happily take it
R=81 I LOVE taxes
F=80 I don't wanna get banned for an expletive I'm thinking with "yea" proceeding it

[tg7174]

I know the CPAexcel review course teachers for tax will specifically tell you that you cannot deduct the cost of the CPA review course because of the change of career argument.

[Author]

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