Continuing Professional Education(cpe)???
Q: An bookkeeper in industry wanted to get his feet wet in
public accounting. So he decided to go back and pursue a
graduate degree in accounting. During 2000, and before
going to gradschool full time, he had two sources of income.
First, he had some W2 wages; second, he had some misc.
1099/self employment income. He is aware that because he is
a professional pursuing education to increase his skills in
the same profession that he may deduct the tuition from his
income (the IRS code section evades him at this moment).
Nevertheless, he is unsure of two things: First, does the
"CPE" credit/adjustment go against his self employment
income ONLY, or may he use the credit against his W2 wages
as well? And second, is the deduction allowable only to the
extent there is income (e.g. if income is $1800 and tuition
is $2000, then may the credit for tuition be for $1800 or
A:I'm not an expert, but my take would be that, if the W-2 wages and the SE income are in the same profession, and the CPE aids that profession, then the cost should be split between Schedule C and Form 2106 in proportion to earnings on Schedule C and on line 7. I don't recall the education deductions being limited to earnings.
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