Tuition & Fees deduction

[Gretel]

A recent post made me look up some info in Pub.970.

I didn't know that there is a major difference in who can claim this deduction as opposed to the education credits.

If the dependent paid the education expenses or is deemed to have paid it no one can claim the deduction. Only if parents actually paid it for their dependent they can claim it.

For the credits the parents can claim even if they didn't pay.

I didn't know and thought some other preparers might not know either. Maybe I just misread?

[Chief]

Tuition Fees Deduction

Taxpro monthly has an article IRS explains where to claim extended deductions in its Feb 2007 issue. Software programs generally did not include this credit or the educator expense credit in their software. Politicians each year manage to screw up the tax program and increase the need for people like us.

Generally the education credits will prove to be advantageous for the person filing.

Now for my question: When would you us the tuition fees deduction instead of the education credit. Do all the credits require that you be a candidate for a degree. I know the Hope Credit does and is available only for 2 years.

[Gretel]

Now for my question: When would you us the tuition fees deduction instead of the education credit.

If income is too high to be eligible for credits.

[Joe Btfsplk]

I figure it the easy way

I just put it in each way and let my program calculate the credit or deduction. It will come up with a zero credit if income is too high or will give the Lifetime Learning credit if the person isn't qualified for the Hope Credit.

[S T]

Tuition Deduction or Ed Credits

My tax program also will allow me to place the $$ amount of tuition in and then will calculate to the best advantage, sometimes it is a credit against taxes, and sometimes it is a reduction against income reducing AGI, and then sometimes nothing at all due to the income limitations.

TTB page 12-2 has a great overview chart of the Hope Credit, Lifetime and Tuition and Fees Deduction.

Sandy

[Gretel]

Yes, TTB has a great chart. My problem was not to figure which one is the best, my software does this too. But in cases when student paid fees or is deemed to have paid then tuition and fees deduction is not available. I was not aware of this, and certainly the software doesn't know.

[Gene V]

Yes, TTB has a great chart. My problem was not to figure which one is the best, my software does this too. But in cases when student paid fees or is deemed to have paid then tuition and fees deduction is not available. I was not aware of this, and certainly the software doesn't know.

Thanks Gabriele for the tuition and fees clarification. My program does the automatic calculation also, but it does have a box to check if the fees are only good for the Hope and Learning credit.

[Jesse]

A recent post made me look up some info in Pub.970.

I didn't know that there is a major difference in who can claim this deduction as opposed to the education credits.

If the dependent paid the education expenses or is deemed to have paid it no one can claim the deduction. Only if parents actually paid it for their dependent they can claim it.

For the credits the parents can claim even if they didn't pay.

I didn't know and thought some other preparers might not know either. Maybe I just misread?

I know if a third party paid, such as Grandparent, paid for the tuition it is not deductible for the tuition deduction, but if the parent of or the dependent child paid the tuition I thought it is eligible for the tuition deduction. Is this incorrect?

[Gretel]

The way I understand it is that if paid by dependent tuition and fees deduction is lost.

[Bird Legs]

Tuition Credit

My thought was that whoever claimed the student as the dependent was able to
take the credit.
Methinks that sometimes I think too much.

[jerome]

The tax book, page 12-3 under the heading Expenses Paid by a Dependent says a special rule allows taxpayers to use a dependent student's payments to claim education credits, including direct payments by third parties that are treated as paid by the student. This rule does not apply to the tuition and fees deduction or other education benefits.

Then under Expenses Paid by Parents it says students who qualify to claim an education credit can use payments by their parents to claim the credit. Similarly, students who qualify to deduct tuition and fees can deduct payments made by their parents. In these situations, the payments are treated as gifts to the student.

So when the student pays the tuition, only the student can take the tuition and fees deduction. But if the parent pays the tuition, the tuition and fees deduction can be claimed by either the parent or the dependent student.