You may be able to deduct qualified tuition and related expenses even if you do not itemize deductions on Schedule A, Form 1040. This deduction may be beneficial to you if you cannot take either the American Opportunity or Lifetime Learning tax credit because your income is too high. Beginning in 2007, in order to claim the tuition and fees deduction, you must complete Form 8917, Tuition and Fees Deduction, and file it with Form 1040 or Form 1040A. Previously, a worksheet was provided to help taxpayers figure the amount of the deduction. The Tax Relief Act of 2010 retroactively reinstated the tuition and fee deduction for 2010 and extended it through tax year 2011.
Maximum Deduction and Income Limits
You can deduct up to $4,000 of qualified tuition and related expenses if your modified adjusted gross income is not more than $65,000 ($130,000 on a joint return). If your modified adjusted gross income is more than $65,000 ($130,000 on a joint return) but not more than $80,000 ($160,000 on a joint return), you can deduct up to $2,000 of qualified tuition and related expenses.
Generally you can claim the deduction if all three of the following requirements are met. (1) You pay higher education qualified expenses. (2) You pay the education expenses for an eligible student. (3) The eligible student is yourself, your spouse, or a dependent you claim as an exemption on your tax return.
Qualified Educational Expenses
In general, qualified tuition and related expenses are tuition and fees paid by you, your spouse, or a dependent. Student activity fees and fees for course-related books, supplies, and equipment are included in qualified tuition and related expenses only if the fees must be paid to the institution as a condition of enrollment or attendance. You must reduce your qualified expenses by the amount of any tax-free education assistance you receive.
Eligible Educational Institutions
Eligible educational institutions are any college, university, vocational school or other postsecondary educational institution eligible to participate in student aid programs administered by the United States Department of Education.
Compatibility with Other Tax Benefits for Higher Education
You cannot deduct any amount for qualified tuition and related expenses for a year if the American Opportunity or Lifetime Learning Tax Credits are claimed with respect to expenses of the individual for whom the tuition and related expenses were paid, or you can deduct the expense under any other provision of the law.
For additional information on the Tuition and Fees Deduction, see Internal Revenue Service Publication 970.