Taxes deductions and college tuition
diamondcpas
October 16, 2019

Although the cost of higher education continues to mount, the tuition and fees deduction for college students and their parents has been eliminated, beginning this year. However, there are other avenues taxpayers can explore to look for deductions and savings.

While the tuition deductions are no longer available on your 2019 return (filing for 2018 income) , if you still are filing for 2017, you can claim the savings, up to $4,000, for qualified expenses related to tuition and other costs associated with paying to attend a college or university. That deduction is not available to those earning more than $80,000, individually, or $160.000, if filing jointly. This is considered an above-the-line deduction, which means you don’t have to itemize in order to claim it.

It’s important to note too, that taxpayers cannot deduct expenses paid with scholarships or other tax-free monies.

College-related deductions are still available through the American Opportunity Tax Credit and the Lifetime Learning Credit, which can reduce your tax bill up to $2,500 for as long as four years.  These programs allow qualifying individual students and their parents to take deductions for certain expenses associated with undergraduate course costs.

To receive the full $2,500 deduction, an individual taxpayer cannot have a modified adjusted gross income of more than $90,000, or, if filing jointly, $180,000.

The longstanding student loan interest deduction remains in place.

To learn more about the college tuition tax changes, visit www.irs.gov/newsroom/tax-benefits-for-education-information-center. The IRS also offers a Student Loan Interest Deduction Worksheet on its website.

If you have any questions about tax deductions for college tuition, please contact your tax advisor at Diamond & Associates, PC with any questions. We are here to help!

0 Comments

Recent Posts

5 IRS Tax Scams & How To Spot Them

5 IRS Tax Scams & How To Spot Them

Nothing makes a person’s blood run colder than finding out you have been scammed out of your personal information and thousands of dollars. In this day and age, scammers are lurking everywhere to find their next targets. Your accountant does everything in their power to keep your taxes confidential from outside sources and is diligently on the lookout for scams to avoid.

How Crypto Trading May Affect Your Taxes

How Crypto Trading May Affect Your Taxes

Trading cryptocurrency is all the rage. It is rare to have a conversation with a colleague that does not include the ups and downs of crypto. If you have been dabbling in cryptocurrency or digital assets, are you aware of how crypto trading may affect your taxes? This exciting new hobby has earned a spot on your tax return, and you have specific reporting obligations to the IRS.

How the SECURE 2.0 Act May Affect Your Retirement Savings Planning

How the SECURE 2.0 Act May Affect Your Retirement Savings Planning

The $1.7 trillion budget bill signed by President Biden on December 23, 2022 includes the SECURE 2.0 Act of 2022, which could affect your retirement planning in a significant way. Laws related to retirement plan distributions and contributions have been revamped to encourage the average American to save more toward retirement. 

Let’s look at how the SECURE 2.0 Act may affect your retirement savings planning for 2023 and beyond.

QUESTIONS?

Reach out for a consultation.

Diamond & Associates CPAs