As Tax Day draws near you may wonder if you’re claiming every tax deduction possible. Families of dependent college students and independent college students often want to know if their college tuition is tax deductible.
According to Business Insider, filing circumstances determine tax four breaks below:
$2,500 credit for qualified education expenses
$2,000 credit for qualified education expenses
You cannot claim both credits in the same tax year.
For more information on taxes related to education, consider connecting with a personal financial advisor. Investopedia offers great tips to find the right service for you and/or your family.
Is Tuition Tax DeductibleThe short answer is, yes—there was a college tuition and fees deduction for taxpayers that paid qualified tuition and fees for tax years 2019 and 2020. However, the college tuition tax deduction does not apply for the 2021 tax year. The Taxpayer Certainty and Disaster Tax Relief Act of 2020 cancelled the tuition and fees deduction. Congress House Bill 133, section 104, eliminated the tuition deduction for the current tax-year 2021. This amendment included increased income limitations for the Lifetime Learning Credit.
Tuition and Fees Deduction 2020 & 2019If you have already filed your tax return for years 2019 or 2020 and would now like to claim a college Tuition and Fees Deduction, you can file an amended return. The IRS requests you complete a Form 1040-X. If amending your 2020 or 2019 tax returns you could reduce your taxable income by $4,000 or $2,000. The deduction amount is based upon your modified adjusted gross income (MAGI) and filing status. A completed Form 8917 is needed to claim this deduction.
- $4,000 deduction: Filing Single, MAGI less than $65,000
- $4,000 deduction: Filing Married Joint, MAGI less than $130,000
- $2,000 deduction: Filing Single, MAGI $65,000-$80,000
- $2,000 deduction: Filing Married Joint, MAGI $130,000-$160,000