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

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Tax in Action: Practical Strategies for Tax Pros

Jeremy Wells, EA, CPA

13 episodes

5 days ago

Join Jeremy Wells, EA, CPA, as he breaks down the complexities of tax law into practical guidance you can apply immediately. Each episode focuses on a specific tax strategy, credit, or compliance issue that matters to tax professionals and business owners. Rather than theoretical discussions, Jeremy delivers actionable insights based on real-world scenarios and current tax regulations. Whether you're navigating Section 1031 exchanges, maximizing research credits, or helping clients with energy tax incentives, this podcast provides the technical details and strategic considerations you need to confidently serve your clients. Perfect for tax practitioners looking to deepen their expertise and business owners wanting to make more informed tax decisions.

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Education

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Business

Education

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

Tax in Action: Practical Strategies for Tax Pros

56 minutes

3 months ago

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

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.

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(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

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https://www.linkedin.com/in/jwellstax
https://www.steadfastbookkeeping.com

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This podcast is a production of the Earmark Media