The Tax DX Blog

• Academy of Neonatal Nursing

• Air & Surface Transport Nurses Association

• American Academy of Ambulatory Care Nursing

• American Academy of Nurse Practitioners

• American Association of Neuroscience Nurses

• American Association of Nurse Anesthetists

• American Association of Nurse Assessment Coordinators

• The American Association of Nurse Attorneys

• American Association of Nurse Life Care Planners

• American Association of Occupational Health Nurses

• American College of Cardiovascular Nurses

• American College of Nurse-Midwives

• American College of Nurse Practitioners

• American Holistic Nurses Association

• American Nephrology Nurses’ Association

• American Nurses Association

So you want to advance your nursing career by networking. I always knew that you were very smart person. Plus judging by the list above, you done some great research. This list is just a small portion of great nursing association waiting for you. Let us imagine that is now April 15th and the birds are singing in the air. It is a wonderful day because your taxes are due. Why would the IRS set that deadline date knowing that your working a night shift on the 14th and 15th? You are now rushing to your 2nd favorite accountant because you that I'm your first love. Suddenly, my voice appears in your head and I softly say "did you remember to deduct your association dues and have a bless day?"

Every possible deduction counts so lets learn about deducting your "qualifying" professional association dues. Yes, I said "qualifying." The IRS doesn't give anything away with a catch.

Professional association dues are noted under the general heading of Unreimbursed Employee Expenses. Claim these expenses on Schedule A, the form for listing all itemized deductions. Add these and other miscellaneous deductions together, and deduct only that amount that exceeds 2 percent of your adjusted gross income, showing on Line 38 of your Form 1040. If your employer reimburses you for any professional association dues, you can't deduct them.

ROLL CALL......

• Associate of Nursing, or Associate of Science in Nursing degree (ASN or ADN)

• Nursing Diploma

• Bachelor of Science in Nursing degree (BSN) 

• Master of Science in nursing degree (MSN)

• Ph.D. Nursing  degree

•  Licensed Practical Nurse or Licensed Vocational Nurse (LPN or LVN)

• Nurse Practitioner degree (NP)

• Advanced Practice Nurse degree (APN).

• Certified Nurse Anesthetist (CRNA)

• Clinical Nurse Specialist (CNS)

• Certifies Nurse Midwife (CNM)

• Registered Nurse (RN)

I swear I wish that my gift to the world was for caring for others. Look at just some of the many opportunities within the nursing field. The sky is really the limit. It is quite possible that you will be in school for the majority of your professional life. Lets not even mention about continuing education costs. Wouldn't it be great for Uncle Sam to help you out with some of your educational expenses? Well good news, Uncle Sam is kind enough to help out a little. In my world, a little is better than nothing!

Here is the good and bad news about education tax deductions and credits:

The Lifetime Learning Credit

Good news: The Lifetime Learning Credit is for qualified tuition and related expenses paid for eligible students enrolled in an eligible educational institution. This credit can help pay for undergraduate, graduate and professional degree courses--including courses to acquire or improve job skills. There is no limit on the number of years you can claim the credit. It is worth up to $2,000 per tax return.

Bad news: To claim the full credit, your MAGI, modified adjusted gross income must be $52,000 or less ($104,000 or less for married filing jointly). If your MAGI is over $52,000 but less than $62,000 (over $104,000 but less than $124,000 for married filing jointly), you receive a reduced amount of the credit. If your MAGI is over $62,000 ($124,000 for joint filers), you cannot claim the credit.

The American Opportunity Tax Credit

Good news: American Opportunity Tax Credit is a credit for qualified education expenses paid for an eligible student for the first four years of higher education.You can get a maximum annual credit of $2,500 per eligible student. If the credit brings the amount of tax you owe to zero, you can have 40 percent of any remaining amount of the credit (up to $1,000) refunded to you.

Bad news: To claim the full credit, your MAGI, modified adjusted gross income must be $80,000 or less ($160,000 or less for married filing jointly).You receive a reduced amount of the credit if your MAGI is over $80,000 but less than $90,000 (over $160,000 but less than $180,000 for married filing jointly).You cannot claim the credit if your MAGI is over $90,000 ($180,000 for joint filers).


Student Loan Interest Deduction

Good news: You may be able to deduct interest you pay on a qualified student loan. Generally, the amount you may deduct is the lesser of $2,500 or the amount of interest you actually paid and it is subject to a phaseout, which means the amount of the deduction gradually decreases and phases out completely if and when your modified adjusted gross income (MAGI) amount reaches the annual limit.

Bad news:  If your modified adjusted gross income is under the threshold where the phaseout begins, then you can deduct up to $2,500 in student loan interest. If your modified adjusted gross income falls within the phaseout range, then your limit for the student loan interest deduction will be prorated or eliminated.

Tuition and Fees Deduction

Good news: You may be able to deduct qualified tuition and related expenses that you pay for yourself, your spouse or a dependent as a tuition and fees deduction.                     
     
Bad news: You cannot take the tuition and fees deduction on your income tax return if your filing status is married filing separately, or if you may be claimed as a dependent on someone else's return. If your modified adjusted gross income exceeds certain limits, your deduction is reduced or eliminated depending on your filing status. You cannot claim both the tuition and fees deduction and an American opportunity tax credit or lifetime learning credit for the same student in the same tax year. You cannot claim a deduction or credit based on expenses paid with tax-free scholarships, fellowships, grants, or education savings account funds such as a Coverdell education savings account, tax-free savings bond interest or employer-provided education assistance.

Deducting Work-Related Educational Expenses

Good news: You may be able to deduct work-related educational expenses paid during the year as an itemized deduction. To be deductible, your expenses must be for education that (1) maintains or improves your job skills or (2) that your employer or a law requires to keep your salary, status or job.

Expenses that you can deduct include:

• Tuition, books, supplies, lab fees, and similar items
• Certain transportation and travel costs, and
• Other educational expenses, such as the cost of research and typing

Bad news: Even if the education meets either of these tests, the education cannot be part of a program that will qualify you for a new trade or business or that you need to meet the minimal educational requirements of your trade or business. Although the education must relate to your present work, educational expenses incurred during temporary absence from your job may be deductible. After your temporary absence, you must return to the same kind of work. Usually, absence from work for one year or less is considered temporary.      

The Ugly Truth

I simplified all of the possible educational educations. I don't want your head to explode from a tax overdose. It is highly recommended that you consult with a tax professional like myself (shameless plug) to know if you qualify.

I didn't forget about nurses that work as independent contractors. I will write a dedicated blog post for all the possible business tax deduction, which will include some educational deductions.


Jamaal Solomon, EA, MST

It was a bright summer day and all the birds were singing. I was on my way to the hospital because I had a severe case of a paper cut-itis after completing a challenging tax return. A nurse took care me and her name was Coleigne. She relieved the harsh pain of the paper cut and made me feel at home. We decided to get married and lived happily ever after with two beautiful children!

That story would be a great story to tell my future grandchildren except it wasn't the truth. I met my wife at our  undergraduate college and we dated two years after graduation. She was first an Respiratory Therapist when we dated. I was young and dumb so I told everyone that I dating a nurse. Nurse sounds way sexier than Respiratory Therapist. I drove her crazy because I repeatedly declared that everyone is a nurse works in a hospital! I honestly had not respect for the differences of healthcare professionals. In my world, if you were not a doctor then obviously you were a nurse. All this changed when my wife decided to go back to school after we got married to be become a Registered Nurse.

While my wife was studying to be an RN, I received a behind the scene access to what it takes to become a registered nurse. Her program was extremely demanding both physically and mentally. There were times that I had to be her practice lab rat. Her classmates needed to support each other to make it through the program. They also had to perform community service. I got to meet some of her classmates and they all seem to be very intelligent and caring. I learned how hard the entrance exam can be to pass. I also learned how tough it is to find a job at the "right" hospital straight after college. Basically, I developed a new love for all nurses (not just my wife) and hold them to a higher standard.

One of my professional specialties is representing individuals in front of the IRS. I started to notice that I was representing more and more nurses with tax issues. Each situation was unique and different. One nurse worked as an independent contractor and didn't take out taxes. She owed the IRS over $100,000 in back taxes and penalties. Another nurse trusted an fraudulent accountant and got audited. There were other cases that involved nurses. I started taking special interest in these cases because my wife is a nurse and I have a lot of respect for her fellow nurses. It has become my mission to educate as much nurses as possible about their tax obligations. My blog posts will be catered to only nurses.

Stay tuned for some great posts!!!