Tuition and Fees Tax Deduction

The Tuition and Fees Deduction is a federal tax deduction for higher education expenses.

Expenses that qualify for the Tuition and Fees Deduction
Education expenses that qualify for this deduction include tuition and related fees required for the student’s enrollment or attendance at an eligible postsecondary educational institution. The student can be you, your spouse, or a dependent you claim as an exemption on your tax return. Expenses don’t include room and board or other personal, living, or family expenses. (Note: For students attending an eligible education institution in certain designated Midwestern disaster areas in counties of Arkansas, Illinois, Indiana, Iowa, Missouri, Nebraska, and Wisconsin, the definition of qualified education expenses for this deduction has been expanded.)

How much can you deduct?
The maximum tuition and fees deduction for 2008 taxes is $4,000, but the actual deduction allowed depends on income. You may only be able to deduct $2,000.

How the Tuition and Fees Deduction is determined
The Tuition and Fees Deduction is based on Modified Adjusted Gross Income (MAGI). If your MAGI is:

  • up to $65,000 ($130,000 if you are married filing jointly), you can deduct up to $4,000 of your education expenses
  • between $65,000 ($130,000 if married filing jointly) and $80,000 ($160,000 if married filing jointly), you can deduct up to $2,000 of your education expenses

The benefit of the Tuition and Fees Deduction
If your MAGI is too high to allow you to qualify for the Hope Credit or Lifetime Learning Credit ($58,000/$116,000 limit), you may be able to take advantage of the tuition and fees deduction instead. This deduction is available to taxpayers whose MAGI falls between $58,000 ($116,000 if married filing jointly) and $80,000 ($160,000 if married filing jointly).

How to claim the Tuition and Fees Deduction
You claim a tuition and fees deduction by completing Form 8917 and submitting it with the tax return filer’s Form 1040 or 1040A. The filer can be you, your spouse if you file jointly, or your parent if you’re being claimed as a dependent.

Relevant IRS Forms

  • 1098-T: Your accredited school should send you one in early February. The 1098-T tells the IRS what the school billed you, payments they received from you, and other details related to your enrollment.
  • 8917: To calculate your tuition and fees deduction and report it on your 1040

Read all the terms and conditions related to IRS education tax breaks
For complete, detailed explanations of “qualified expenses,” “eligible school,” “academic period,” “allowable “funding sources,” and “Midwestern disaster areas,” carefully read all the information on the IRS 2008 Tax Benefits for Education web site.

Source: U.S. Internal Revenue Service

Please note: This article is intended to be a general overview of an education tax benefit for the tax year 2008. EducationGrant.com does not advise on any personal income tax requirements or issues. Use of any information from this web site is for general information only and does not represent personal tax advice either express or implied. You are encouraged to visit the IRS website for more information and to seek professional tax advice for personal income tax questions and assistance.