The Tuition Deduction allows a taxpayer to take a deduction for eligible college expenses paid on behalf of themselves, their spouse, or a dependent. The amount deducted must be reduced by any tax-free scholarships, grants or awards received. The maximum 2009 Tuition and Fees Deduction is $4,000, and is subject to income limitations. This deduction is actually an “above the line” adjustment, which means you do not need to itemize your deductions to use it. You can take the standard deduction and still also deduct your tuition and fees in other words. A taxpayer must choose between using this deduction or claiming one of the two tax credits also available for college expenses, however. The costs must be incurred at an eligible institution to receive a deduction for fees and tuition. Any college or university eligible to participate in a Department of Education student aid program is considered eligible. All tuition and registration fees paid to that university are deductible up to the annual limit in case the institution of a student is eligible. Related fees” are deductible, if the university considers them mandatory in addition to this. There are much more things you should have know about it.

The tuition and fees deduction

The Tuition and Fees Deduction cannot be taken for the same student, in the same year as the Hope Scholarship, Lifetime Learning Credit, or the American Opportunity Tax Credit.   The Tuition and Fee Deduction may be taken for one person in the same year a tax credit is used for another, however. The Tuition and Fees Deduction has a “double dipping” rule similar to the Student Loan Interest Deduction. his rule prohibits deducting amounts that have been previously deducted as something else, or deducting tuition that was paid with a tax-free withdrawal from a Section 529 Plan. This deduction is not permitted for a taxpayer filing their tax return under the Married Filing Separately status. Most institutions will send individuals a Form 1098-T to verify tuition received by the school. Eligible expenses may be added to this and deducted in the “Adjustments” section of a Form 1040 or 1040A. There are complex rules regarding this deduction and certain situations, such as refunded tuition, students paying their own tuition, and the timing of tuition payments. Before you make any decisions about your unique situation, be sure to review IRS Publication 1970 and talk to your tax professional. The Tuition and Fees Deduction is reduced (or “phased-out”) for taxpayers with certain levels of Modified Adjusted Gross Income, simply known as MAGI. For taxpayers claiming Single, Head of Household, or Widow(er) status – 65 000 dollars or less – Up to $4,000 may be deducted. 65,001dollars – 80,000 (MAGI) – Up to $2,000 may be deducted. 80,001 (MAGI) or more– No deduction is permitted. Filing Jointly status - 130,000 (MAGI) or less– Up to $4,000 may be deducted.; 130,001 - $160,000 (MAGI) – Up to $2,000 may be deducted; 60,001 or more – No deduction is allowed.