Students - Training costs
December 20, 2011 | 35,00 EUR | answered by StB Manuela Ponikwar
Dear Sir or Madam,
I am currently in my first year of studies and work on a freelance basis on the side.
Can I deduct the following (in connection with my studies or otherwise)?
1. A mathematical software that was purchased for $1899 for studying in the USA? If so, over 3 years or as a lump sum?
2. Can I deduct this additional qualification from taxes?
http://www.certifiedfinancialengineer.com/
I have not yet completed my studies, this qualification will be completed after or parallel to my studies, and the costs amount to €2374.05.
It is not a degree program, just a qualification.
Thank you.
Dear inquirer,
Thank you for your inquiry, which I would like to answer as follows within the scope of an initial consultation considering the appropriate fee:
The costs for a first degree are tax deductible up to a maximum of 4,000 EUR per year as special expenses (for own professional training, further education). This special expense deduction will increase to 6,000 EUR starting in 2012 and applies to all costs of your studies.
I would define the additional qualification as anticipated advertising costs and thus potentially allow for a loss carryforward. Argue the independence from the degree program and the level of specialization as concrete preparation for the desired job (perhaps you also have an internship where skills are required and they might consider hiring you... something along those lines). Alternatively, these could be training costs for your self-employment (if you are self-employed in the same field?!), i.e. business expenses that could potentially generate a loss carryforward. The same applies to the software (3 years, if over 410 EUR).
In the summer, the Federal Fiscal Court issued 3 judgments regarding the tax deductibility of costs for a first degree program as anticipated advertising costs. Unfortunately, these judgments have now been overturned by new legislation, so the special expense deduction remains in place. This includes all costs, including literature, materials, software, etc. if they were incurred for the purpose of studying.
The major disadvantage is that a special expense deduction only takes effect if it is offset against income. So if you have no taxable income (depending on the extent of your self-employment and other income), the special expense deduction will not apply. A loss carryforward could only be generated within the framework of anticipated advertising costs.
I hope this information is helpful to you.
Merry Christmas!
Manuela Ponikwar
Tax consultant
www.ponikwar.de
