TurboTax / Tax Calculators & Tips / All Tax Guides / Tax Deductions and Credits / Are College Entrance Exams Tax Deductible?

Are College Entrance Exams Tax Deductible?

Updated for Tax Year 2015


OVERVIEW

The fees for taking SAT, ACT and other college entrance exams are not tax-deductible, but the federal government does allow a number of educational deductions and tax credits Find out more about these educational deductions and credits and how they can benefit you.


Unfortunately for mom and dad, the fees for taking SAT, ACT and other college entrance exams are not tax-deductible, but the federal government does allow a number of educational deductions and tax credits. Though they only pertain to the current expenses of students who have already enrolled, you may be able to use those listed deductions and credits to offset your family's other college expenses

Deducting expenses

You can claim a tax deduction for college expenses incurred for yourself, your spouse or your children. The deduction is available even if you don't itemize and it covers tuition and mandatory college expenses up to the maximum set by the IRS for the current tax year.

Mandatory expenses include, for example, student activity fees if every student is required to pay them. The IRS halves the deduction for taxpayers above a certain income level, and as income rises further, the deduction is phased out completely.

Lifetime Learning Credit

The Lifetime Learning Credit allows you to claim up to 20 percent of your out-of-pocket college expenses each year for yourself, your spouse and your children. You can claim a maximum credit of $2,000, if your family's total college expenses add up to $10,000.

You can claim Lifetime Learning for as many years as the student attends college and for both undergraduate and postgraduate studies, even if the student attends only one class a year. The IRS lists other educational tax credits in Publication 970.

Tax credit restrictions

The Lifetime Learning Credit has several restrictions. The student must attend what the IRS considers a "qualified college" to claim the credit. A qualified college is one that is eligible to participate in Department of Education student aid programs.

In addition, you can't claim the credit if your annual income exceeds the limit set by the IRS for the current tax year or you are married but you and your spouse file taxes separately.

Claiming education credits

When you file your tax return, you claim your tax credits using IRS Form 8863. You can only claim the credits for out-of-pocket expenses, not costs covered by grants or veterans' benefits. You cannot claim the same expense as both a tax credit and a tax deduction.

The IRS also cautions that you cannot claim deductions or tax credits for room, board, medical expenses, student health fees, transportation or insurance, even if the fees are mandatory for students.

TurboTax can help you determine which reduction credits you qualify for, and will also recommend the credits that give you the best tax outcome.

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.