It's a bit too late for me but I was wondering if you can itemize the cost of the Step 3 USMLE exam and the cost of your permanent state license, DEA number and state drug number (BNDD number for Missouri)? Thanks.

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Any educational or licensing costs that qualify you for a new trade or business are generally not tax deductible. Examples of non-deductible expenditures include medical school tuition for physicians and the Bar exam for lawyers. An expense incurred that improves your skills in your current trade or business is deductible.

The question is whether the cost of that exam and the cost of your initial licensing qualify you for your new trade or business or improve your skills in your current trade or business.

I've heard the argument that you're allowed to practice medicine within a hospital, even without obtaining those licenses and without passing certain board exams. If that is true, then you can argue that the cost of your board exams and the cost of your licenses should be deductible to you.

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I'm running into the exact same issue (apparently in the exact same state, as well!). Here's the dilemma. The board exam is not required for practicing medicine - one does not need to be board certified for practice, so that seems quite clearly deductible. The USMLE exam and permanent licensure are required, ultimately, to practice after residency (but not if you stay in research). However, they are NOT required to work in a hospital if you are still a resident as you are issued a temporary license through the residency program. At the same time, is completing residency to start practicing medicine a "new trade or business"? I would argue that you can't remain a resident forever and that the transition is the natural progression of the same trade rather than a new one. I'm not sure whether the IRS agrees with me, though...

Thanks!

Zip Code: 63139