If you're putting yourself, a spouse or children through college, a tax break for some of the costs might await you. As an above-the-line deduction, you can write these expenses off without having to itemize deductions. The Internal Revenue Service's Form 8917 helps you determine if you qualify and how much you can claim.
Don't Use If. . .
You're not eligible to deduct tuition and fees if you’re married but file separately or someone can claim you as an exemption – even if that someone doesn’t take it. You also cannot double-dip by claiming an item as both a qualified educational expense and itemized deduction or business expense.
Only Count Mandated Expenses
For the adjusted, or net, expenses on line 1, calculate the difference between qualified expenses and tax-free or veterans’ educational assistance, such as scholarships and Pell grants. The expenses you can count are what you spent on tuition and books, supplies and equipment you were required to buy from the school. Student activity fees and other non-classroom expenses that you must pay the school to attend also qualify. Don’t include personal living expenses, such as the dorm charges, apartment rent, student health fees or classes covering hobbies, sports or games that are not part of your degree or enhancing your job skills.
Calculate your adjusted gross income – what you would report on line 37 of Form 1040 or line 21 of Form 1040A – without the tuition and fees deduction. The income you report on line 22 of Form 1040 or line 15 of Form 1040A goes on line 2 of Form 8917. For line 3, use the total of what you claim on lines 16, 17, 18 if you’re a Form 1040A filer or lines 22 to 33 if you’re using Form 1040. These above-the-line deductions include your payments as a teacher for school supplies, contributions to individual retirement account contributions, student loan interest, alimony and infusions to health savings accounts.
As of publication, you can deduct up to $4,000 if line 5 is not more than $65,000, or $130,000 if you're married filing jointly. If line 5 is more than this threshold, but not more than $80,000, or $160,000 if married filing jointly, your break is capped at $2,000. You don't get a tuition and fees deduction if line 5 is more than $80,000 ($160,000 if married filing jointly).
Christopher Raines enjoys sharing his knowledge of business, financial matters and the law. He earned his business administration and law degrees from the University of North Carolina at Chapel Hill. As a lawyer since August 1996, Raines has handled cases involving business, consumer and other areas of the law.