[harisrinivasan]

Hi
I am an international student. Last year (2006) I did my internship at two companies in the same field as my masters.
I came to know that I should file my taxes using 1040NR and 8843.
But with these forms I am not sure how to claim tuition deductions.
I read somewhere that I could use form 2106 and so I read pub 529 related to this:

529:Work-Related Education
You can deduct expenses you have for education, even if the education may lead to a degree, if the education meets at least one of the following two tests.
1. It maintains or improves skills required in your present work.
2. It is required by your employer or the law to keep your salary, status, or job, and the requirement business, serves a business purpose of your employer.

From Jan 2007 I am working in another company in the same field. So is this my present work and present employer?
My question is whether I can use this form for tuition expenses deductions and transportation expenses to school. Also prior to coming to the US to do my masters, I worked in the same field in an Indian company.

Thanks
Hari

[AtlantaTaxExpert]

You CANNOT claim tuition deductions; it is NOT a valid deduction for non-reidnet aliens.

As for the work-related education deduction, since you are a student doing internships related to your graduate degree, by definition the education you paid for qualified you for the job. That makes the expense NOT deductible.

For it to be deductible, you would have to PROVE that you got the internships as a result of your current working experience and NOT because you were in a master's degree program. Clearly, that is not the case.

[harisrinivasan]

Thanks for the reply.
Does this apply even if I have had an year experience in the same field before coming to US for M.S? Also can proof be proof of prior experience and bachelors degree?

Thanks
Hari

[AtlantaTaxExpert]

I have had this discussion with several clients.

The IRS will look at the fact that you went to school FIRST, then got an internship from a referral from your school as a prima facie case that the master's degree is a qualifying education for the job.

You CAN claim the deduction, but, In my opinion, it will result in an audit that you ultimately lose.