March 03, 2014
Heather Santonino, Tax & Business Services Manager, Featured in Long Island Business News Article, "Why Your MBA May Cost More Than It Used To."
By Claude Solnik
Your MBA may have just got a little more expensive, even if tuition's exactly the same.
Although a Masters in Business Administration is a popular means of growing income and advancing professionally, a recent tax court ruling could increase the price tags for certain students.
In December, U.S. Tax Court Judge Kathleen Kerrigan ruled in favor of the IRS in a case where a student sought a tax deduction for his MBA tuition. Students often qualify for "miscellaneous education deductions" for MBAs and other degrees, if the degrees are deemed a necessary and ordinary business expense that improves their skills.
Kerrigan, however, denied Adam Edward Hart an $18,600 deduction, based on tuition costs he ran up earning his MBA, on the grounds that he failed to prove that the degree benefited him in his career – primarily, because of his limited work experience and the amount of time he spent unemployed.
The ability to prove professional necessity or career advancement could now "be subject to higher scrutiny," noted Heather Santonino, a tax services manager at Melville-based accounting firm Marcum LLP.
"More people are enrolled in schools, because there are fewer jobs for young people," Santonino noted. "And one of the most highly sought-after masters is an MBA."
Various schools contacted by LIBN declined to comment on any potential impact the ruling will have on MBA enrollment, but Santonino said "it potentially could hurt enrollment."
"If people were enrolling with the anticipation of the deduction and find they wouldn't qualify, it may cause them not to enroll," she said.
Click here to read the full article on www.libn.com >>