This college expense deduction lets you reduce your taxable income by up to $2,500 for qualified student interest paid during the year. Student loan interest is still tax deductible.The education must enhance or improve skills related to your trade or business or must be required by law. However, if you are self-employed you may be able to deduct education expenses. Before this change, you may have benefitted from a deduction if the education was required by your employer or by law. Work-related education expenses were previously tax deductible, but this deduction is not available for employees from 2018-2025 due to changes to itemized deductions with tax reform.Prior to 2021, you could generally claim the tuition and related expenses deduction if you paid qualifying education expenses for higher education, paid the education expense for an eligible student, and the eligible student was you, your spouse, or your dependent. The deduction was 100% of qualified higher education expenses with a maximum of $4,000, $2,000, or $0, depending on the amount of your modified AGI and filing status. The phaseout for this deduction began at $65,000 ($130,000 for MFJ) for 2020. Such expenses must have been required for enrollment or attendance at an eligible educational institution. The tuition and fees deduction was an adjustment to income if you incurred qualified education expenses for you, your spouse, or your dependent. Tuition and fees are no longer tax deductible after 2020.Given the tax changes in recent years, it’s important to check which college expenses are tax deductible or allow you to take a credit and which expenses no longer qualify.
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