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February 18, 2010
Deducting Tuition and Fees on Your Taxes
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You may be able to deduct qualified education expenses on your tax return. Qualified expenses include tuition and fees you pay for yourself, your spouse, or your dependents, if you claim them as an exemption on your tax return.
If you qualify for the tuition and fees deduction, your income subject to tax can be reduced by up to $4,000.
Generally, this deduction is allowed for qualified education expenses paid for:
- Enrollment at an institution of higher education during 2009.
- An academic period beginning in 2009.
- An academic period in the first 3 months of 2010.
For example: If you paid $1,500 in December 2009 (for qualified tuition beginning in January 2010), you may be able to use that $1,500 in figuring your 2009 deduction.
Did You Pay With a Loan?
You can claim a tuition and fees deduction for qualified education expenses paid with the proceeds of a loan. You figure the deduction for the year in which you paid for the expenses. For loan payments sent directly to your school, count them on the date your account is credited.
Did You Withdraw From a Class?
You can claim a tuition and fees deduction for qualified education expenses not refunded when you withdrew.
For example: If you only received a partial refund for the money you paid for tuition, you may be able to count the amount you were not refunded as part of your deduction.
Did You Have Other Expenses?
Student activity fees and expenses might include course-related books, supplies, and equipment. These are considered qualified education expenses only if the fees and expenses must be paid to the institution as a condition of enrollment.
You cannot claim the tuition and fees deduction and an educational credit in the same year. Before choosing between the two, find out more about all the borrower tax incentives. If you have other tax questions, browse the Ask American Student Assistance archives.
This document was prepared for informational purposes only and cannot be considered tax advice or otherwise. Please see your tax professional for additional guidance.
IRS Publication 970
Find out more about all the tax benefits for education in IRS publication 970.
