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The Tuition and Fees Deduction is one of two federal tax deductions that allow college students or their families to deduct higher education expenses from their income at tax time. The student can be you, your spouse, or a dependent you claim as an exemption on your tax return.

Expenses that Qualify for the Tuition and Fees Deduction

Education expenses that qualify for this deduction include tuition and related fees required for the student's enrollment or attendance at an eligible postsecondary educational institution. Expenses don't include room and board or other personal, living, or family expenses. (Note: For students attending an eligible education institution in certain designated Midwestern disaster areas in counties of Arkansas, Illinois, Indiana, Iowa, Missouri, Nebraska, and Wisconsin, the definition of qualified education expenses for this deduction has been expanded.)

How Much Can You Deduct?

The maximum tuition and fees deduction for 2008 taxes is $4,000, but the actual deduction allowed depends on income. You may only be able to deduct $2,000.

How the Tuition and Fees Deduction is Calculated

The Tuition and Fees Deduction is based on Modified Adjusted Gross Income (MAGI). If your MAGI is:

• up to $65,000 ($130,000 if you are married filing jointly), you can deduct up to $4,000 of your education expenses
• between $65,000 ($130,000 if married filing jointly) and $80,000 ($160,000 if married filing jointly), you can deduct up to $2,000 of your education expenses

Benefits of the Tuition and Fees Deduction

If your MAGI is too high to allow you to qualify for the Hope Credit or Lifetime Learning Credit ($58,000/$116,000 limit), you may be able to take advantage of the tuition and fees deduction instead. This deduction is available to taxpayers whose MAGI falls between $58,000 ($116,000 if married filing jointly) and $80,000 ($160,000 if married filing jointly).

How to Get the Tuition and Fees Deduction

You claim a tuition and fees deduction by completing Form 8917 and submitting it with the tax return filer's Form 1040 or 1040A. The filer can be you, your spouse if you file jointly, or your parent if you're being claimed as a dependent.