This deduction allows eligible taxpayers, who paid certain educational expenses during the tax year, to deduct such expenses from his/her taxable income. To take this deduction, the IRS requires:
-the taxpayer himself, his spouse, or his claimed dependent was the student enrolled at or attending an eligible educational institution
-the education expenses were actually paid during the tax year for academic periods beginning in during the tax year or the following year’s first three months
Once the above requirements are met, a taxpayer must ensure additional factors do not apply to him/her. A taxpayer cannot claim the tuition and fees deduction if any of the following apply:
-Taxpayer files as Married filing Separately
-Another person can claim the taxpayer as a dependent on his/her own return (irrelevant whether or not they actually did)
-Taxpayer’s modified adjusted gross income (Line 5, Form 1040) is more than $80,000 ($160,000 for jointly-filing couples)
-Taxpayer was a nonresident alien for any part of the year and did not elect to be treated as a resident alien for tax purposes
As a final note, Form 1040 (Line 49 and Line 66) offers two education-related credits (via Form 8863) which are similar to the Line 34 Tuition and Fees deduction. Taxpayers cannot, however, claim the Line 34 deduction for any student that is claimed (by the taxpayer himself or by any other person) in 2012 under either of these two credits.
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