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Welcome back tuition and fees deduction! You were missed.

For those parents who have a child in college or are taking classes themselves, we miss the days before 2018 when we could deduct higher education tuition and other expenses from our taxable income. Well, with the passing of the Disaster Act came many “tax extenders”, which are a series of temporary provisions in the tax code that have expired and must be cleared by Congress retroactively each year for filers to take them. One of those extenders is the tuition and fees deduction which is an above the line deduction so it will directly reduce your adjusted gross income.

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What expenses are covered under this deduction?

Expenses covered under the deduction include anything related to coursework, including tuition, books, supplies, and equipment, that must be paid to the school as a condition of enrollment. Costs related to room and board, insurance, student health fees, transportation or other personal living expenses are not eligible for the deduction. Expenses that were paid for using a scholarship, grant or employer assistance cannot be deducted.

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The extender brings back this great option, but there is a catch. The deduction is limited based on your MAGI (Modified Adjusted Gross Income) and married couples filing separately are not eligible. I know what you are all thinking, how much do we get?

  • $4,000 if your MAGI was less than $65,000 as a single filer or $130,000 as married filing jointly
  • $2,000 if your MAGI was more than $65,000 but less than $80,000 as a single filer, or more than $130,000 but less than $160,000 as married filing jointly
  • $0 if your MAGI was above $80,000 as a single filer or $160,000 as married filing jointly

Make sure you subscribe to the Henry+Horne tax insights blog so that you stay up to date with all the changes that have happened and reach out to us for all your tax needs! Don’t hesitate to contact us if you have any questions about the tuition and fees deduction, or other questions in general.

Brandon Broschinsky