FAQ's >> Educational Expenses
Listed below are examples of frequent tax-related questions with corresponding answers. While many issues may seem straightforward, the
answers to many of these questions illustrate the complexity of the U.S. taxation system. For further assistance with these or any other tax
issues, please contact us.
Although the information provided herein is derived from data published by the Internal Revenue Service, it is not considered authoritative,
and should only be used as a general guide to understanding the underlying issues. Authoritative guidance should be obtained from a tax
professional or directly from the Internal Revenue Code, Regulations, Revenue Proclamations, Publications, Bulletins, Announcements, etc.
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My university required each incoming freshman to come to school with their own computer. Is there any way to deduct the cost of the
computer from my tax liability?
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What educational expenses are deductible?
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Am I eligible to claim both my job education expenses (minus 2% of AGI) and the Lifetime Learning Credit on my taxes?
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I have a child attending a private Catholic grade school. Is any or all of the tuition I pay deductible or a tax credit?
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I will be homeschooling my child next year and would like to know if school related expenses, such as curriculum, school supplies,
field trip activities, etc. are deductible?
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Can I take a deduction for the interest I paid on my student loan?
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Is the $2,500 maximum deduction for student loan interest per PERSON, or per RETURN? I am a married filing jointly, and have paid
over $3,000 of qualified interest payments for my husband and me. Are we allowed to deduct $5,000 ($2,500/person) or only $2,500 total
on our return?
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Last year, my parents took out a student loan for me in their name and I also took out a student loan. My parents received Form
1098-E for their loan and I also received Form 1098-E for my loan. Can we both claim the interest from the loans on our tax returns?
Last year, I was not their dependent.
My university required each incoming freshman to come to school with their own computer. Is there any way to deduct the cost
of the computer from my tax liability?
The cost of a personal computer is generally a personal expense that is not deductible. However, if the school bills everyone, as a
condition of attendance or enrollment for proprietary computer devices and/or software available no where else, then this may qualify as
an expense towards either the Lifetime Learning Credit or Hope Credit.
What educational expenses are deductible?
You may be able to deduct work related educational expenses as an itemized deduction on Schedule A of Form 1040 (minus 2% of AGI). To
be deductible, your expenses must be for education that:
- Maintains or improves skills required in your present job; or
- Serves a business purpose and is required by your employer, or by law or regulations, to keep your present salary, status, or job.
Certain restrictions also apply.
Am I eligible to claim both my job education expenses (minus 2% of AGI) and the Lifetime Learning Credit on my taxes?
If you are eligible to deduct educational expenses and are also eligible for the lifetime learning credit, then it is possible to claim
both, as long as you do NOT use the same educational expenses to claim both benefits. Your expenses must be divided between the two.
I have a child attending a private Catholic grade school. Is any or all of the tuition I pay deductible or a tax credit?
Other than a medical deduction for tuition in the case of a special school for physical or mental disability, tuition for primary or
secondary education is neither deductible as an educational expense nor as a charitable condition, and there are not tax credits for the
tuition.
However, a portion of the tuition may be eligible for a state credit depending on the state of residence.
Can I take a deduction for the interest I paid on my student loan?
Interest paid over any period of time on a qualified education loan is deductible. There are also income limits.
There is no deduction if you file as married filing separately, if you are claimed as a dependent, or if the loan is from a related party
or a qualified employer plan.
Is the $2,500 maximum deduction for student loan interest per PERSON, or per RETURN? I am a married filing jointly, and
have paid over $3,000 of qualified interest payments for my husband and me. Are we allowed to deduct $5,000 ($2,500/person) or only $2,500
total on our return?
The deduction is limited to $2,500 per return. If you file as “married filing separately”, there is no deduction.
Last year, my parents took out a student loan for me in their name and I also took out a student loan. My parents
received Form 1098-E for their loan and I also received Form 1098-E for my loan. Can we both claim the interest from the loans on our
tax returns? Last year, I was not their dependent.
In order for a taxpayer to claim a deduction for student loan interest, the loan must be incurred for the taxpayer, the taxpayer’ spouse, or a
person who was the taxpayer’s dependent when the taxpayer took out the loan. Since you were not your parents’ dependent when they took out the
student loan, the interest they paid on the loan does not qualify for deduction. However, the student loan interest payments you made on the
student loan you took out on your behalf are eligible for deduction, provided all the other requirements are met.
