TurboTax / Tax Calculators & Tips / All Tax Guides / College / Video: What Educational Expenses Are Tax Deductible?

Video: What Educational Expenses Are Tax Deductible?

Updated for Tax Year 2015


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.

Hello, I'm Jill from TurboTax with some information for taxpayers who pay educational expenses.

Did you know that the federal government is a big supporter of higher education, and encourages you to enroll in school by offering a range of educational tax deductions? Therefore, if you are a student, or you claim a dependent who is, you may want to evaluate your eligibility to deduct your school expenses and student loan interest.

The tuition and fees deduction can reduce your taxable income by up to $4,000 for the tuition and fees you pay for yourself, a spouse or a dependent to enroll at a postsecondary institution, such as a college, university and even a vocational school. If you plan on claiming the deduction, remember that the IRS requires you to file a Form 8917 with your tax return, which means you can't file a 1040-EZ. You must use a 1040A or standard 1040 form.

If you take courses because your employer or a government agency requires it, or the courses improve skills that you can use at work, you can also consider claiming the work-related education deduction, but only if you itemize your deductions on Schedule A. You can never take the tuition and fees deduction and a work-related education deduction for the same expenses, so it's important that you evaluate which deduction will provide the most tax savings. TurboTax can help with this.

Generally speaking, as your income increases, the amount you can deduct for tuition and fees decreases. This threshold can change from year to year, based on the latest tax laws. How big a deduction you're eligible for depends on your modified adjusted gross income, which is just your adjusted gross income before claiming the tuition and fees deduction. (Again, TurboTax will figure this out for you based on your answers to simple questions about your income and expenses.)

When taking the work-related education deduction on Schedule A, however, you must report your education expenses with the miscellaneous deductions that are subject to the 2-percent adjusted gross income limitation. This means that only the amount that exceeds 2 percent of your AGI is deductible. You can claim either deduction regardless of whether you use personal funds or a student loan to finance your education. And even better: you can deduct some of the interest when you begin repaying the loan.

When you file with TurboTax, we'll ask you simple questions about your income and your education expenses, recommend the choices that get you the biggest deductions, and fill out all the appropriate forms for you.

Get every deduction you deserve

TurboTax Deluxe searches more than 350 tax deductions and credits so you get your maximum refund, guaranteed.

For only $54.99*
Start for Free

Looking for more information?

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.

Security is built into everything we do
Here's how
* Important Offer Details and Disclosures
  • Filing Deadline: IRS filing deadline for tax year 2015 is April 18, 2016 (except for residents of Massachusetts or Maine, where the IRS filing deadline for tax year 2015 is April 19, 2016).
  • Try for Free/Pay When You File: TurboTax online and mobile pricing is based on your tax situation and varies by product. Free 1040EZ/A + Free State offer only available with TurboTax Federal Free Edition; Offer may change or end at any time without notice. Actual prices are determined at the time of print or e-file and are subject to change without notice. Savings and price comparisons based on anticipated price increase expected 3/18/16. Special discount offers may not be valid for mobile in-app purchases.
  • TurboTax CD/Download products: Price includes tax preparation and printing of federal tax returns and free federal e-file of up to 5 federal tax returns. Additional fees apply for efiling state returns. E-file fees do not apply to New York state returns. Savings and price comparison based on anticipated price increase expected 3/18/16. Prices subject to change without notice.
  • Anytime, anywhere: Internet access required; standard message and data rates apply to download and use mobile app.
  • Fastest refund possible: Fastest tax refund with efile and direct deposit; tax refund timeframes will vary.
  • Pay for TurboTax out of your federal refund: A $X.XX Refund Processing Service fee applies to this payment method. Prices are subject to change without notice. This benefit is available with TurboTax Federal products except the TurboTax Home & Business/QuickBooks Self-Employed bundle offers.
  • About our TurboTax Product Experts: Customer service and product support vary by time of year.
  • About our credentialed tax experts: Live tax advice service is available via phone for your toughest tax questions; fees may apply. Service, experience levels, hours of operation and availability vary, and are subject to restriction and change without notice. Not available for TurboTax Business customers.
  • #1 best-selling tax software: Based on aggregated sales data for all tax year 2014 TurboTax products.
  • Most Popular: TurboTax Deluxe is our most popular product among TurboTax Online users with more complex tax situations.