How do I claim an educational expense on my return?
If you are an employee, you generally must complete Form 2106 or Form 2106-EZ. Educational expenses are deducted as miscellaneous itemized deductions on Schedule A of Form 1040. Self-employed individuals include educational expenses on Schedule C, C-EZ, or F of the Form 1040.
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Where can I get more information on educational expenses?
For more information on educational expenses, refer to Publication 508, Tax Benefits for Work-Related Education.
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I have a child attending a private Catholic grade school. Is any or all of the tuition I pay deductible or a tax credit?
The tuition is neither deductible as an educational expense nor as a charitable contribution, and there are no tax credits for the tuition. You cannot deduct as a charitable contribution tuition, or amounts you pay instead of tuition, even if you pay them for children to attend parochial schools or qualifying nonprofit day-care centers. Refer to Publication 526, Charitable Contributions. You also cannot deduct any fixed amount you may be required to pay in addition to the tuition fee to enroll in a private school, even if it is designated as a "donation."
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I will be homeschooling my child next year and would like to know if school related expenses, such as curriculum, school supplies, field trip activities, etc., are deductible?
There is no deduction for your child's home schooling expenses. These are nondeductible personal, living, or family expenses. Please refer to Publication 529, Miscellaneous Deductions.
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If your child is diagnosed as ADD and cannot function in a public school setting and must be sent to a private school, can the cost of the private school be deducted from your taxes?
The expense would not be deductible as an education expense. The facts and circumstances will determine if the cost of the private school qualifies as a medical expense.
Per Publication 502, Medical and Dental Expenses, you can include in medical expenses tuition fees you pay to a special school for a child who has severe learning disabilities caused by mental or physical impairments, including nervous system disorders. Refer to Publication 502, Medical and Dental Expenses. Your doctor must recommend that the child attend the school, and the main reason for using the school must be its resources for relieving the disability.
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Is there a deduction for the costs of a child's music or swimming lessons? The child attends public school and these lessons are not related to any school program.
The costs of a child's music or swimming lessons are normally not deductible. These are nondeductible personal, living, or family expenses. Please refer to Publication 529, Miscellaneous Deductions.
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Can I file Form 1040EZ if I have interest to deduct from student loans?
No, you cannot claim the student loan interest deduction if you file Form 1040EZ. To claim student loan interest, you must file a Form 1040 or Form 1040A.
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Can I take a deduction for the interest I paid on my student loan?
Beginning January 1, 1998, taxpayers who have taken loans to pay the cost of attending an eligible educational institution for themselves, their spouse, or their dependent in some circumstances may be able to subtract from gross income the interest they pay on these student loans. For information, refer to Publication 970, Tax Benefits for Higher Education and Tax Topic 456, Student Loan Interest Deduction.
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What are the limits for deducting interest paid on a student loan?
If you are otherwise qualified to deduct interest paid on a student loan, you can deduct the full interest paid (in 2000, up to $2,000 per return) if you are single and make less than $40,000, or Married Filing Jointly (MFJ) and make less than $60,000. If you make more than $40,000 but less than $55,000 if single, or more than $60,000 but less than $75,000 if MFJ, then your interest deduction is limited. If you make more than $55,000 and single, or more than $75,000 and MFJ, there is no student loan interest deduction. For more information, refer to Publication 970, Tax Benefits for Higher Education.
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Does consolidating my student loans impact how is the 60-month period for student loan interest calculated?
No, refinancing or consolidating an education loan does not extend the 60-month period. The 60-month period is based upon the original loan.
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What educational expenses are deductible?
You may be able to deduct work-related educational expenses as an itemized deduction on Schedule A of Form 1040. To be deductible, your expenses must be for education that:
- Maintains or improves skills required in your present job; or
- Serves a business purpose and is required by your employer, or by law or regulations, to keep your present salary, status, or job.
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Is the $2,000 maximum deduction (credit) for student loan interest per PERSON, or per RETURN? I am married filing jointly, and have paid over $3,000 between my husband and I of qualified interest payments. Are we allowed to deduct $4,000 ($2,000/person) or only $2,000 total on our return?
The deduction is limited to $2,000 per return for tax year 2000. The maximum deduction for 2001 and thereafter is $2,500. For married people filing separate returns, the deduction is limited to $0 per return.
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If I file married filing separately can I claim the new student loan interest deduction?
No, you cannot claim the deduction in any tax year in which your filing status is married filing a separate return. For more information, refer to Publication 970, Tax Benefits for Higher Education.
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I am a parent repaying a loan for my daughter's college education. The loan is a parent's loan taken out in my name. Is the interest deductible from my tax return?
Yes, provided she was a dependent when you received the loan, the interest paid on the loan is deductible provided it meets all of the other requirements. For more information, refer to Publication 970, Tax Benefits for Higher Education.
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My mother borrowed money for my college education. Now that I'm out of school, I make the monthly payments, but the loan is under her name. Can take the student loan deduction since I'm actually making the payments?
Neither the parent nor the child qualify for the student loan interest deduction in this cases as you must:
- be legally obligated to repay the loan (the parents are),
- have made the payments on the loan yourself (the child did), and
- not be claimed as a dependent to qualify for the deduction.
There are additional qualifications in Publication 970, Tax Benefits for Higher Education.
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Last year, my parents took out a student loan for me in their name and I also took out a student loan. My parents received Form 1098-E for their loan and I also received Form 1098-E for my loan. Can we both claim the interest from the loans on our tax returns? Last year, I was not their dependent.
No, only one person may claim the student loan interest deduction on qualifying loans received in one year. One of the qualifications for claiming the student loan interest is that the expenses must have been for you, your spouse, or a person who was your dependent when you took out the loan. Since you were not your parents' dependent when they received the student loan, the interest they pay on the loan does not qualify. However, the student loan interest payments you made on your student loan are deductible (provided that the student loan payments are required).
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I am an employee. What form do I use to claim business expenses for local transportation?
Generally, you must use Form 2106, Employee Business Expense, or Form 2106-EZ, Unreimbursed Employee Business Expenses, to give your deduction for employee business expenses, and attach if to your Form 1040. Your deductible expense is then taken to Form 1040, SCHEDULE A as a miscellaneous itemized deduction subject to the 2% of adjusted gross income limit. Special rules may apply, depending of your employee's reimbursement arrangement. For additional information, refer to Publication 463, Travel, Entertainment, Gift, and Car Expenses, and Tax Topic 514, Employee Business Expense.
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- Publication 463, Travel, Entertainment, Gift, and Car Expenses
- Form 1040, U.S. Individual Income Tax Return
- Form 1040, SCHEDULE A, Itemized Deductions
- Form 2106, Employee Business Expense
- Form 2106-EZ, Unreimbursed Employee Business Expenses
- Tax Topic 514, Employee Business Expense
I moved to a different state to accept a new job. Will I be able to deduct all of my moving expenses?
If you moved because of a change in your job location or because you started a new job, you may be able to deduct your moving expenses. To qualify for the moving expense deduction, you must meet two tests. The first test is distance. The second test concerns time. You can only deduct certain moving expenses that occur within the 1st year and were not reimbursed by your employer. For additional information, refer to Tax Topic 455, Moving Expenses, or Publication 521, Moving Expenses.
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What are types of educational expenses?
Educational expenses include amounts spent for tuition, books, supplies, laboratory fees, and similar items. They also include the cost of correspondence courses, as well as formal training and research you do as part of an educational program. Transportation and travel expenses to attend qualified educational activities may also be deductible.
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Can I deduct the cost of classes I need for work?
Your expenses are not deductible if the education is required to meet the minimum educational requirements of your job, or is part of a program that will lead to qualifying you in a new trade or business.
Although the education must relate to your present work, educational expenses incurred during vacation or other temporary absence from your job may be deductible. However, after your temporary absence you must return to the same kind of work. Usually, absence from work for one year or less is considered temporary.
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Am I eligible to claim both my job education expenses (minus 2% of AGI) and the Lifetime Learning Credit on my taxes?
You can not deduct educational expenses and claim a credit for those same expenses. You must choose one or the other.
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I am employed as a Registered Nurse and am currently taking classes to be an Advanced Practitioner of Nursing (which is a master's Degree in Nursing). My classes are not required by my employer but they do increase my knowledge to do my job well. I will probably continue working for the same employer when I graduate. Can I claim the cost of tuition, books, travel to the university, etc., as an unreimbursed business expense?
Yes, you can. However, you may want to consider claiming the Lifetime Learning Credit which may result in more of a tax break than taking a miscellaneous itemized deduction. For information on the education credits, including the Lifetime Learning credit, refer to Publication 970, Tax Benefits for Higher Education.
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I took an accounting course in order to keep my salary on my current job. My employer did not reimburse me for the expenses. Can I take a deduction on my tax return for the cost of the course?
You may be able to deduct work-related educational expenses as a miscellaneous itemized deduction subject to the 2% adjusted gross income limitation on Form 1040, SCHEDULE A. To be deductible, your expenses must be for education that:
- Maintains or improves skills required in your present job, or
- Serves a business purpose and is required by your employer, or by law or regulations, to keep your salary, status, or job.
Your expenses are not deductible if the education is required to meet the minimum educational requirements of your job or is part of a program that will lead to qualifying you in a new trade or business. For additional information on deductible educational expenses, refer to Tax Topic 513, or Publication 508, Educational Expenses.
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My employer is including my graduate school tuition reimbursements on my W-2. Where do I claim these education expenses on my Form 1040?
They are miscellaneous itemized deductions that would go on Form 1040, SCHEDULE A, Itemized Deductions.
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Is the exclusion from income of up to $5,250 of employer-provided educational assistance under a qualified program still available?
Yes. However, it applies only to benefits you receive for courses that begin before December 31, 2001. The exclusion does not apply to graduate-level courses that began after June 30, 1996. For more information, refer to Publication 508, Educational Expenses.
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