Can I get a tax break if I am paying for my spouse's education?

Question

Do we have to file jointly for this? Are there any other ways to get tax breaks - I am planninng a car purchase- a loan, for example?

Answer 1

You MUST file jointly to get any credits or deductions. Thank congress for the numerous, confusing ways to get a tax break on eduction. I recommend reading Publication 970 at www.irs.gov. In fact, you rarely benefit from filing separately. Even in those cases where you actually benefit, your state tax return may be worse off. Some states make you file using the same method you used for Federal taxes and rarely are state taxes better when filing separately. If you have the time, do your federal and state taxes both ways to see which is better.

Every education credit/deduction has an income limit, so it is possible to make too much money to take advantage of them.

Unless the education is work related (translation: unless the education is for your own business or for your job), the only thing you can write off are the tuition and fees. You won't be able to write off books, supplies, or travel.

The credits are the Hope Credit (tons of restrictions) and the Lifetime Learning Credit. The deduction is called Tuition and Fees Deduction. Do your taxes using each one separately and use the one that gives you the largest tax return.

If the eduction is related to your job, then it goes on Form 2106 which eventually makes its way to your Schedule A subject to the 2% limitation. If it is associated with your own sole-proprietorship, then it goes on your Schedule C. For both of these situations, you will be able to write off the books, supplies, and travel in addition to the tuition and fees.

As far as the car, unless you are self-employed and plan on using the car for your self-employment, you will not be able to get a tax break on the interest on the loan. You may be able to write off the sales tax IF you itemize and IF your total state SALES tax for the year is greater than your state INCOME tax. Finally you will most likely get a tax break if, instead of taking out a normal car loan, you take out a home equity loan to pay for the car. Keep in mind that there are limitations to this too. For example, if the total amount of all of your home equity loans (that are NOT used to improve your home) exceed $100,000, the interest on the amount over $100,000 is not deductible. Confusing? Thank congress.

Good luck!

Answer 2

Depends... are you filing married, filing joint?

If so, then yes.

It also depends on what level of schooling your spouse is taking and what the type of schooling that you spouse is taking.

As far as the car loan, only if you are planning to purchase a hybrid, and I am not sure that the tax breaks are worth the trouble. Consumer Reports said that Hybrids are not a good idea yet, and I would steer clear from them.

You can write off the sales tax paid for the car, but only if you itemize!

If you finance your car using a home equity loan up to the value of the home, then you can write off the interest payments, but other than that, you are looking at no tax breaks that I know of.

Post some more info or email me you email address and I will consult with you about this more.

Good Luck!

Answer 3

Definately educational expenses are deductible. Keep all your receipts and either go to a qualified tax preparer or use a program like Turbo Tax or Tax Cut that will help you through the whole process. You can get credits for tuition, books and probably even gas and parking expense. You would have to file jointly to get the tax breaks for your spouse; however, you also get married tax credits that make it worthwhile. Check your library for some of the tax books that will point out other deductions that you are entitled to. Even your tax software or tax preparer's fees are deductible.

Answer 4

you gotta file jointly... because unless it is a medical expense, you can't pay for another person's obligation and claim a deduction on your return...

well, the previous person pretty much said everything there's to know about tax breaks on car... you get some credit for getting a hybrid... and some special stuff on home equity loan... haha, hope it helps

Answer 5

yes you can.