Tax Question

[Raybyrnes]

My wife is working towards her dental licenses in the US. Is ther any way of deduction the training, material, transportation and lodging assiciated with the licensing process?

[surveyor]

itemized miscellaneous deductions….

under itemized miscellaneous deductions, yes you can. Here is a faq:

Unreimbursed Employee Expenses
You can deduct only unreimbursed employee expenses that are:

Paid or incurred during your tax year,

For carrying on your trade or business of being an employee, and

Ordinary and necessary.

An expense is ordinary if it is common and accepted in your trade, business, or profession. An expense is necessary if it is appropriate and helpful to your business. An expense does not have to be required to be considered necessary.

You may be able to deduct the following items as unreimbursed employee expenses.

Business bad debt of an employee.
Business liability insurance premiums.
Damages paid to a former employer for breach of an employment contract.
Depreciation on a computer or cell phone your employer requires you to use in your work.
Dues to a chamber of commerce if membership helps you do your job.
Dues to professional societies.
Home office or part of your home used regularly and exclusively in your work.
Job search expenses in your present occupation.
Laboratory breakage fees.
Legal fees related to your job.
Licenses and regulatory fees.
Malpractice insurance premiums.
Medical examinations required by an employer.
Occupational taxes.
Passport for a business trip.
Repayment of an income aid payment received under an employer’s plan.
Research expenses of a college professor.
Rural mail carriers’ vehicle expenses.
Subscriptions to professional journals and trade magazines related to your work.
Tools and supplies used in your work.
Travel, transportation, entertainment, and gift expenses related to your work.
Union dues and expenses.
Work clothes and uniforms if required and not suitable for everyday use.
Work-related education.

[TemekuT]

Hold on a minute folks! Is she receiving her license for the first time? If so, there is no deduction for becoming qualified for a new line of work or training for a new profession.

Or, is she licensed in another state or country? If so, you may be able to deduct expenses on schedule A as unreimbursed employee business expenses to the extent they exceed 3% of AGI, or deduct on Schedule C if self employed as a dentist already. If she is a dental hygienist qualifying as a dentist, that is not a qualified expense as she is training for a different profession in the eyes of the IRS.

Or, is this continuing education? If so, you may be able to deduct expenses on schedule A as unreimbursed employee business expenses to the extent they exceed 3% of AGI, or deduct on Schedule C the total amount.

Regarding the FAQ, just go to the IRS website and search the topic, find the appropriate IRS publication, and follow the bullet by bullet instructions.

Better yet, go to Turbo Tax online and the software will ask the failsafe questions for this common inquiry and guide you to place the appropriate answers in the blanks so that you comply with the tax code.

Be careful – as an example you mentioned lodging. What do you mean by lodging? Is it the lodging you need when you go out of area to take the boards? If so, that would be a qualified expense if you are already licensed in NV and are getting licensed in CA. However, if you aren’t licensed yet at all, that would not be a qualifying expense as you are completing the requirements for a new profession.

Any other CPA’s out there – please comment. I am not current in the field, but I do know the basics here.

[Raybyrnes]

She is working on getting her licenses in then US. Her previous license was from Brazil. For this reason I feel that I am currently SOL. There are 4 series of tests. Itr begins with 2 written parts administered by the ADA(American Dental Association) and the CADA(California Dental Association) From there you progress to a manakin dental examination. For this you are goig to need to practice which requires roughly 2 to 3K in equipment and you are going to need pracvtice courses another 3 to 5K. These courses are given up in the LA area so commuting back and forth is a waste of time so you are going to speand a few nights up there. Once this is passed you move on the patient practical. Once again you will need to practice 3 to 4K for review course and then you need to set aside another 2 to 3k becasue you have to rent out a dental office to screen patients for the procedures required by the dental board. Additionally once patients areidentified you need to provide transportation, lodging, and compensation for them assisting you. Additionally you need to have cash oon hand i the event that a dentist at the Practical exam loses his patient and tries to bribe your patient. That is the process of getting your licenses. I am certain that there are some fairly good accountant that might be able to justify the expenses in a way that I am unfamiliar wiht but as I see it you are somewhat SOL until you have your licesnes. Correct me if I am wrong.

[Author]

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