Educational Cost Tax Deductions If Not Used On Other Options
Taxpayers may be able to deduct qualified tuition and related expenses paid during the year for themselves, spouse, or a dependent, even if deductions or not itemized. Taxpayers with a modified adjusted gross income (MAGI) up to $65,000 ($130,000 on a joint return) may deduct up to $3,000 of qualified higher education expenses for courses during 2002 and 2003. The maximum deduction increases in the tax years 2004 and 2005 to $4,000. A taxpayer may not claim both this deduction and a tax credit for education expenses during the same year. A taxpayer that has higher expenses, which are paid by a tax-free distribution from Coverdell ESA, a qualified tuition program, or an education savings bond, may not use the same expenses for this deduction. For the tax years 2004 and 2005, married taxpayers with a MAGI up to $160,000 and single taxpayers with a MAGI up to $80,000 are permitted a maximum deduction of $2000.
FOR MORE INFORMATION ON EDUCATIONAL TAX AND SAVINGS OPTIONS, VISIT THE FOLLOWING WEB SITES:
- Internal Revenue Service, Publication 970, Tax Benefits for Higher Education www.irs.gov/pub/irs-pdf/p970.pdf
- TCRS Tax Credit Reporting Service http://tcrs.com
- For general information on TRA97 or to view/print a copy of your University of Alabama 1098-T go to www.1098T.com