I am a teacher and spent $1200 on renewing my national board certification and I’m curious if it is tax deductable. I know you are not my accountant or tax attorney.
National board certification is not necessary to teach; I could get by with a professional teaching license. However, in my state professional license + national boards = master teaching license and so I do have to retain my national board certification in order to retain my current license (I have the master teaching certification). If I were to lose my national board certification I would drop back to a professional license.
So are the fees for renewing my national board certification tax deductable?
Currently, expenses for the production of income associated with being an employee (or any expenses connected to income from an activity not being run for profit) are not deductible. Before the TCJA, and after the individual provisions sunset in 2025(?), expenses for the production of income were/will be deductible as miscellaneous itemized expenses on Sch A, meaning you have to reduce your total miscellaneous itemized deduction by 2% of your AGI, and then you only get use out of what remains if you itemize your deduction using Sch A.
This has been one of the parts of the TCJA that feels blatantly wrong. It’s just plain stupid, and personally I think it’s not constitutional, because it makes the “income” tax in some sense a gross receipts tax, which are not allowed unless apportioned to the state blah blah blah that the income tax gets around because there’s an amendment explicitly making it legal. But no one would ever save enough money to be able to make it worthwhile to attack in court.
If you have a business though that in any way requires that license, then you can deduct it in full as part of reporting that business’s activity. So try to get a gig as an independent contractor somehow.
To be clear, the TCJA disallowed all miscellaneous itemized deductions in the 2018-2025 time span, not just those for production of income. I’m pretty sure that when they decided to axe them to generate a bit of revenue to offset the tax cuts, they were entirely ignorant of exactly what they were doing, thinking they were just getting rid of a few very minor things that maybe shouldn’t be deductions. And that’s what most miscellaneous itemized deduction are - but expenses for the production of income as an employee or as part of a activity not being run for profit just happened to be included in this set, and those almost certainly should always be allowed.
IMO It was very deliberate. They wanted to give every Joe lunchbucket a $200 tax cut. They wanted to give every Joe Fatcat a $1M tax cut. Who do you hammer to balance the books? The medium sized businessperson and the high end W-2 worker. So they gutted the deductions available to those folks.
I make a nice W-2 living. The Trump tax “cuts” amounted to a $10K tax increase for me. The loss of employee business expenses was a hefty chunk of that. The loss of mortgage interest deductions was most of the rest.
As to the OP: IANA official tax person. But pre TCJA that would have been a deduction you could claim that IMO would be 90+% likely to survive an audit. As others have said, it’s totally non-deductible these days.
You should be able to negotiate with your employer for them to pick up some of the expenses if you were regularly deducting a significant amount of them. Not necessarily all of them, or perhaps not without a reduction in salary, but with the change in the tax law there’s the ability for you to not have your take-home pay decrease by the entirety of the amount it would otherwise due to the extra taxes, and also cost your employer slightly less. Granted, the larger the institution you work for, the harder that you will be able to get this done yourself, but that’s one of the reasons that I don’t want to work for huge institutions; while I may not make as much money on a W-2, I get everything I need paid for because my employer knows it’s cheaper than forcing me to pay for them when compensation is negotiated knowing that reimbursements for those expenses are part of the package.
Excellent thinking in general. Thanks for the suggestion.
However I’m a unionized employee of a Fortune 100 company. My negotiating authority and negotiating leverage is precisely zero. I’m not complaining; I’ve got a pretty good gig. But I am stuck with it as-is where-is: warts, high points, and all.