Computer Software

[Christian]

A client called asking if a software program needed for taking a daughter's college course is deductible. Her daughter is in her junior year of a four year degree program. Why this software is not included in her college expenses is not clear to me but she advises it is needed for this course and is not provided by the school. I am wondering if this is a Schedule A deduction or can it be taken off elsewhere. This for me is one of those seldom encountered items since my clients are primarily older folks.

[Yardley CPA]

Just curious as to the cost of the software?

[Christian]

She advises it will be around $100 or so.

[Yardley CPA]

By the letter of the law, I don't know if the program would qualify.  Here's some information I found on qualified educational expenses from publication 970:

 

http://www.irs.gov/publications/p970/ch06.html

 

Included in this is:

 

Related expenses.   Student-activity fees and expenses for course-related books, supplies, and equipment are included in qualified education expenses only if the fees and expenses must be paid to the institution as a condition of enrollment or attendance.

 

$100 or so, while I'm not suggesting you should do anything unethical, I'm not even sure it would make a difference if you did include it.  I personally would lean toward including it given the nominal amount you're talking about.

[Jack from Ohio]

If it is a REQUIREMENT of one of the courses she is taking, it can be added as additional expense for calculating Education (American Opportunity Credit) expense deductions on 8863. Otherwise, no deduction. Must be REQUIRED, not just suggested. The information provided her for that class will tell whether it is required or just suggested.

3 kids here, total of 11 years in college between them. I have very extensive first hand experience about this stuff.

[Christian]

Thanks Jack. I'll put a note in her file. It's no biggy but every little bit helps, right? This is for 2014.