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May 14 2012 12:00AM

Question

Is paying college tuition a tax deduction?

Answer

There are tax laws that will help to offset the cost of college tuition, but the full cost of paying is not deductible.

You can take a tax deduction for college tuition and other mandatory school fees. This is called the Tuition and Fees Deduction, and is reported directly on Form 1040 or Form 1040A. There is a deduction of up to $4,000 but you have to have earned less than $80,000 filing single or $160,000 filing married. This tuition deduction is temporary: 2011 is scheduled to be the last year that taxpayers can take this deduction. There is also a deduction for those paying interest on student loans which might apply to you as well. The IRS has put together information about this very subject that may be helpful.

If you paid college tuition, you might also be eligible for the Lifetime Learning Tax Credit or the American Opportunity Credit. These tax credits have different income ranges than the Tuition & Fees Deduction. My suggestion is to see which tax break you qualify for, and if you qualify for both the deduction and the tax credits, to go with the tax break that provides the largest benefit.

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