Can I Deduct Educational Expenses My Dependent Paid?
- The tuition and fees tax deduction allows tax payers to claim up to $4,000 in paid educational expenses, as of September 2011. Taxpayers can subtract the claimed amount from their pre-tax income to lower their tax obligation. Claimants can earn no more than $160,000 when filing jointly as a married couple and no more than $80,000 as a single filer. Taxpayers who are married but file their taxes separately cannot claim the deduction. Additionally, all educational expenses are not permissible when claiming the deduction.
- Only expenses that are mandatory and required for enrollment at an institution of higher education are eligible for the deduction. Expenses such as tuition, books and equipment, course-dependent supplies and student activity fees are eligible under the tuition and tax fees deduction. Personal expenses, such as health insurance or room and board are ineligible, even if they are paid to the student’s institution of higher education.
- Parents can only claim the tuition and fees tax deduction if they paid educational expenses for a student and claim an exemption for the student by listing him in the exemption section of their tax return. If the student paid his own educational fees and he is not listed as a dependent in the exemption section of his parent’s tax return, he is entitled to claim the tuition and fees tax deduction for himself. However, if a student is listed in the exemption section of his parents tax return, but he paid his own educational expenses, no one can claim the tuition and fees tax deduction.
- If a student who paid her own educational expenses is eligible to claim the tuition and fees tax deduction, she can do so by completing a Form 1098-T tuition payments statement. It is a violation of federal law to claim the tuition and fees tax deduction for educational expenses that you did not pay. Parents who cannot claim the tuition and fees tax deduction are also ineligible to claim alternate educational tax credits or deductions, such as the American Opportunity Credit or the Lifetime Learning Credit.