OVERVIEW
Are you a student in an educational institution, or do you claim one? The federal government supports higher education, offering many deductions on education-related taxes. Watch this video to find out more about education expenses and deductions. Note: The tuition and fees deduction ended with the 2016 tax year.
The article below is accurate for your 2017 taxes, the one that you file this year by the April 2018 deadline, including a few retroactive changes due to the passing of tax reform. Some tax information below will change for your 2018 taxes, but won’t impact your 2017 taxes. Learn more about tax reform here.
Video transcript:
Hello, I'm Arye from TurboTax with some information about what education expenses are tax deductible.
If you or your spouse are currently a student, or if you can claim a dependent who is, there are a few options to reduce your taxable income.
One: The tuition and fees deduction for qualified education expenses can reduce your taxable income by up to $4,000, even if you don't itemize your deductions. You likely qualify unless you’re above the IRS's income threshold or if you are married and file separately.
How much you can deduct will be based on your modified adjusted gross income, also known as your MAGI. If you use TurboTax, we can help determine if you’re eligible and calculate how much you can deduct.
Two: If you're taking courses because your employer or a government agency requires it, you may also consider taking a deduction, although you'll need to itemize your deductions on Schedule A.
You can only deduct the amount that exceeds 2% of your adjusted gross income. So if 2% of your adjusted gross income is $1000 and you paid $1500 for courses, you can claim $500.
You can claim the deduction whether you pay using personal funds or student loans.
Tip three: You may be able to deduct courses you take that maintain or improve skills needed for your work. For example: If you repair televisions, you can deduct courses you take to keep up with the latest changes in television repair.
For more information about this and other tax topics, visit TurboTax.com.
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