If you paid college tuition for yourself, your spouse or anyone who claim as a dependent, you may be eligible to deduct up to $4,000 of those expenses, even if you don't itemize your deductions. The $4,000 limit is decreased if your income is over $65,000 if single or $130,000 if you are married.
The amount of expenses includes tuition and fees paid to college institutions. It does not include books, transportation and living expenses while at college.
As an alternative to the Tuition Deduction, the American Opportunity Tax Credit allows a credit of up to $2,500 for the first four years of college. As with the Tuition Deduction, the credit is reduced if your income is over $80,000 ($160,000 MFJ). If you don't owe any taxes this year, 40% of the credit (up to $1,000) is refundable, meaning that you can get the IRS to send you a check even if you didn't send them any money all year.
As always, please call (949-683-8111) or email us at info@southcountycpa.com if you have any questions. We are here to help.
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