What can nurses deduct on their taxes?

elkpark · Feb 12, 2004

quite a number of things can be deducted. Education to BECOME a nurse cannot be, but any continuining education (whether CE workshops, professional conventions, or going back to school for another degree) once you are already a nurse can be (inc. mileage, hotels, meals). License renewal fees, certification fees, and professional organization fees can be. I think uniforms can be, if they are not clothing that you would ever wear other than for work. Professional journal subscriptions can be. The instructions for Schedule A give many examples of what types of job expenses can or can't be deducted. These are just the ones I'm thinking of off the top of my head. The basic rule of thumb seems to be that expenses involved in preparing to enter a new field are NOT deductible, expenses related to being in that field once you are already in it ARE.

Of course, there are also some new deductions available for student loans and perhaps some other school expenses (not necessarily nursing school), but I don't really know about those. Haven't been back to school since they started those ...

loriLPN · Feb 12, 2004

elkpark-

so the $6,000 it would take me to go for my RN would be deductable? is that only up to a certain amount?

live4today, RN · Feb 12, 2004

Does one need to show proof of those expenses when filing taxes, or if audited? I have major expenses I could deduct, but did not keep all my sales receipts last year. :)

Katnip, RN · Feb 12, 2004

I would only deduct the things I have receipts for. When someone suddenly shows up with a lot of deductions that they haven't had in the past, that's a red flag for the IRS and they might decide to audit based on that. If you're audited you'll have to show proof of those expenses.

NICU_Nurse, BSN, RN · Feb 12, 2004

Okay. Here's how it works. You *can* deduct work expenses, by itemizing your expenses, but there's a catch. Many things (uniforms that are not supplied by your employer and are not wearable in other settings, tools, journal subscriptions, professional organization membership fees, etc.) can be deducted, but they have to exceed your standard deduction. For example, if you made 53K last year, your standard deduction is somewhere in the range of 9K. If your expenses total more than 9000 dollars, you can deduct them by itemizing. If your expenses are, say, 2500 total, your standard deduction exceeds your itemizing benefit, and you can't itemize. You can do one or the other- whichever one benefits you most. You have to figure out what your standard deduction is from the tax table and then compare it to all of your added up expenses.

As far as education is concerned, yes, you can deduct college expenses if you are a freshman or sophomore (for the first two years of college after high school, regardless of your age). This is the Hope Credit. You get a maximum of 1500 dollars from this, I believe (the first 1000 and then up to 500 of the second thousand, if I'm not mistaken). If your school cost less than 1500, say, a community college, you will get less. The second is the Lifetime Learning credit, which is a bit less money, but you can use it after your first two years of college (if you're no longer a fresh. or soph.). The third is a tuition deduction, which I think only applies to those who have a very large income and don't qualify for the first two.

I added up my expenses this year, and they didn't exceed my standard deduction, which was thousands more than my stuff added up to, even with uniforms, etc.

NICU_Nurse, BSN, RN · Feb 12, 2004

Whoops- forgot the last part.

Yes, technically, you need receipts for everything you claim by itemizing. If you are audited, you are responsible for proving that you earned whatever deductions you took. If you can't do that, you will be fined, and they really stick you with the back interest on those amounts, because that's looked at as fraud.

You can always take your chances that you won't get audited, but if you do, good luck, because it's a real *****.

elkpark · Feb 12, 2004

NICU_Nurse is correct -- as I said in my first post, you have to itemize (have enough deductions to be able to itemize on Schedule A rather than just take the standard deduction) in order to be able to take ANY deductions. For most of us, it's hard to accumulate enough deductions to itemize unless you have mortgage interest to claim. There is not a ceiling on the deductions, but there is a formula given in the instructions for calculating a percentage of your adjusted gross income and subtracting that from your total job-related expenses. You are only able to deduct the final amount after you've subtracted the percentage of your AGI. It's all explained in the Schedule A instructions.

I do not know whether an LPN going back to school to become an RN would count as maintaining/improving your job skills, or entering a new field. That is the basic test for whether or not the job-related educational expenses are deductible. I'd suggest you check that out with the IRS before trying to deduct those expenses ... As NICU_Nurse noted, some of those expenses may be deductible as general school expenses regardless of whether they are related to nursing, or not.

Whether or not you have receipts is up to you, but you'll need them if you're ever audited, just as for any other expenses you claim on your taxes, otherwise you'll be in mucho trouble with the IRS and NOBODY wants that ...