| You can deduct qualified education expenses on | | | | in the year you raise the loan. |
| higher education for you, your spouse or your | | | | 2. If you claim such expenses as a business expense, |
| dependents. Such a deduction can reduce your | | | | you cannot claim them again by way of this deduction. |
| income by $4000. There are specific requirements to | | | | 3. If you are claiming hope or lifetime learning credit, |
| claim this deduction. | | | | you cannot claim this deduction. |
| If you have incurred expenses on higher education on | | | | 4. If you have taken a distribution from a Coverdell |
| yourself, your spouse or your dependent, you are | | | | education savings account (ESA) or a qualified tuition |
| eligible to claim the tuition fees deduction. | | | | program (QTP) for part of these expenses, such |
| However, this deduction is not available to you if you | | | | amount cannot be claimed again by way of |
| file your return as married filing separately or if your | | | | deduction. So no double benefit is allowed. |
| Modified Adjusted Gross Income (MAGI) is more than | | | | 5. If you have paid part of these expenses with the |
| $80,000 ($160,000 for people filing a joint return). Also, | | | | tax free interest on U.S. savings bonds or with the tax |
| this deduction is not available if you are a nonresident | | | | free scholarship, such amount is not eligible for |
| alien for part of the year. People claiming a hope or | | | | deduction again. You need to exclude such amount. |
| the lifetime learning credit for expenses will also not be | | | | 6. If the student pays these educational expenses out |
| eligible. If any other person is claiming exemption for | | | | of a loan, a gift or an inheritance, or wages, he/she can |
| you as a dependent on his or her tax return, then also | | | | still claim that deduction. Such financial arrangements |
| you will not be qualified to claim such a deduction. | | | | do not come in the way of claiming a deduction. |
| The maximum amount that can be claimed is limited to | | | | 7. Some expenses do not qualify for this deduction |
| $4000. This deduction is taken as an adjustment to | | | | – expenses like insurance, medical expenses, |
| income on form 1040 line 34 or form 1040A line 19. | | | | expenses on room and board, transportation |
| The following expenses can qualify for deduction – | | | | expenses and personal or family expenses cannot be |
| 1. Tuition and fees paid for enrolment at an eligible post | | | | claim this deduction under this rule. |
| secondary educational institution. | | | | 8. Some educational institutions might have bundled the |
| 2. Related expenses for course related books, supplies | | | | total fees together. So they will combine all |
| and equipment if these expenses are to be paid as a | | | | expenses for an academic period in one amount. In |
| condition of enrolment. | | | | such a situation, you need to request the institution for |
| Keep in mind the following tips while claiming such a | | | | the allocation of these expenses so that you can find |
| deduction: | | | | out the qualified education expenses. The institutions |
| 1. If you arrange a loan to pay for these expenses, still | | | | are required to make this allocation and they will |
| you can claim this deduction. The deduction is to be | | | | provide you this information on form 1098-T. |
| claimed in the year you pay for the expenses and not | | | | |