Advanced degrees are being obtained by a higher percentage of the middle- and upper-class population than ever before. Many of these students hold full-time jobs. The recent development of online universities has only served to fuel this trend. The ability of working students to take a business expense deduction for tuition expenses likewise has grown in importance.With MBAs being one of the hot degrees to have as of late, because of its apparent ticket to success in many different business settings, it's a small wonder that a recent Tax Court decision has attracted more than its share of attention. That case (Allemeier Jr., T.C. Memo. 2005-207) appears to have opened up the possibility that the expense for obtaining a larger number of MBA degrees can be written off as a trade or business expense.
Before counting on the deduction to lower after-tax tuition costs, however, a careful look at the circumstances addressed by the Tax Court is important. Extension of this good news to other academic programs also deserves investigation. Finally, comparison-shopping in considering alternative routes to the same end - a tax benefit from tuition payments - is worth a look.
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