Can academics write-off research-related expenses? (United States)

Question

This post is currently active on Academia, but it was suggested that I also post it on PF&M. Here is the question:

I am wondering if any research-related expenses can be applied toward a personal tax write-off (in the U.S.). For example, assume I traveled to a conference or meeting to present my research, and all the expenses were paid out-of-pocket. Or, assume that I purchase some equipment or supplies that is used for my research. Does a provision in the tax code exist that would allow the expenses to be considered a tax write off? If so, a link to the IRS rule would be greatly appreciated!

Answer 1

If you're a researcher employed by an entity, then your out-of-pocket research-related expenses that are not being reimbursed fall under "unreimbursed employee expenses". These can be deducted on your schedule A, provided the amounts deducted are above 2% of your AGI (i.e.: if your AGI is 100K, first 2K of the expenses cannot be deducted. If your total expenses is 3K - you only deduct the portion above the 2% limit, 1K in this example). There are qualifications for what can be deducted as employee business expense. In your case, publication 529 explicitly mentions research expenses for a college professor as a qualified expense.

If you're self-employed, then it becomes your own business expense, and is treated depending on what you're doing - either capitalized, added to cost of goods sold, or deducted. For businesses there are specific R&D related provisions and credits. Talk to your accountant.

Answer 2

To add to littleadv's answer, many college faculty are also self-employed as consultants in their areas of expertise and spend part of their time on this work. Most colleges and universities explicitly allow such consulting work subject to limitations, e.g. no more than one day of each (seven-day) week can be spent on consulting. When such people travel to a conference to present their research results, sometimes it is a judgment call as to whether the research is something that they did as part of their work for the college or something that arose out of their consulting work or is a mixture of both. If the paper presented was supported by a research grant or contract awarded to the college (with faculty as the Principal Investigator) and this support is mentioned in the acknowledgments, the answer is obvious. On the other hand, the paper could be work on a new topic that might be the subject of a grant proposal at a later time. Or the paper might be a sanitized version of some work done as a consultant for a company; sanitized in the sense that the company proprietary information (often even the company's name) is not included. Even murkier is travel to attend a conference but not to present a paper. This is a legitimate (but usually unreimbursed) expense for a college professor and can also be a legitimate expense for a consultant. Ditto things like dues for professional society memberships.

Answer 3

No longer deductible under the new tax law.