How Does the Tax Deduction for Tuition Work?
Qualifying for the Deduction
According to the IRS, there are three scenarios that will allow you to claim tuition payments as tax deductions. They include an individual who pays college tuition; an individual who pays the educational expenses associated with college tuition for a student; and an individual who claims a dependent, such as a spouse or child, who pays college tuition. You cannot claim the deduction if your spouse pays college tuition but you are filing your taxes separately, if you are paying college tuition but another person claims you on his taxes, if you earn more than $80,000 as a single person or $160,000 as a married couple, you are a nonresident alien or if you claim a Hope or lifetime learning credit. This credit applies to educations obtained at vocational schools, colleges, universities and other postsecondary educational institutions.
Expenses That Qualify
The tuition and fees that belong to a college student who is enrolled in a college and has attended classes can be claimed as tax deductions. These deductions can be claimed whether they're paid out of pocket or through a student or education loan. These fees can even be claimed if a student withdraws from college and was not reimbursed any of his expenses. Alumni who are making student loan payments can also claim the interest they are being taxed by either the government or private lenders on their tax forms.
Amount of Tax Deduction
How large your tuition tax deduction will be depends not only on how much you're claiming but on your income. If your modified adjusted gross income, or MAGI, is less than $65,000 the maximum deduction is $4,000. If it's less than $80,000 the maximum deduction is $2,000. There is no tax deduction for tuition offered to those who earn more than $80,000. Most Americans file a 1040 tax form. In this case you'll want to list your MAGI on line 38. List the deductions you're claiming for tuition and fees on line 34.
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