If you bought something with a credit card, could you claim it on your taxes?

Question

I purchased a laptop from Dell last year with my Dell Preferred credit card. I would like to write the laptop off on my taxes, because I am a part-time graduate student that take classes online. Could I claim it on my taxes if I purchased it with a credit card?

Answer 1

Education expenses are normally deducted as a miscellaneous itemized deduction subject to 2% of your adjusted gross income (you can only deduct the amount in excess of 2%). However, the education expense has to be related to your current job, either as a requirement of your job, or to enable you to advance in your current position. Education expenses are normally NOT deductible if it is related to finding a new job, and in your case, education towards a "first" job. Therefore, in your situation, you wouldn't be able to claim your laptop computer as a deduction.

However, there are the education credits such as the Hope Credit and/or the Lifetime Learning Credit. This is a credit that you can claim for education expenses such as tuition, books, etc. There are limits as to the amount of the credit, which would typically be used up just from claiming tuition, so applying the laptop computer towards your education expenses for these credits most likely wouldn't benefit you at all.

To address your question as to whether you could claim the purchase even though it was made with a credit card.....as far as the IRS is concerned, they don't care whether you paid for the computer with cash, credit card, or even redeemed soda cans. You would be able to deduct/credit it provided it would be considered a valid education expense.

Answer 2

There are multiple parts to the answer.

As far as the credit card, the date you buy an item and charge it to your credit card is the date recognized for tax purposes, not when you pay it off.

The second part is, what educational expenses are eligible for an education credit. Tuition, and certain related expenses that are required for enrollment or attendance at an eligible institution, are the expenses that qualify. Unless the school specified that you MUST have a laptop, AND MUST buy it from the school, then you would not be able to deduct it. The only way it would be deductible is basically if a laptop purchase is part of the tuition or fees for taking the course. Read the section of IRS Publication on 17 on "Qualified Education Expenses", or Publication 970, "Tax Benefits for Education". From Pub 970, "Tax Benefits for Education", .pages 19 and 33, "student activity fees and expenses for course-related books, supplies and equipment are included in qualified education expenses only if the fees and expenses must be paid to the institution as a condition of enrollment or attendance.

So no, you can't take an education credit for the laptop purchase, but that has nothing to do with purchasing it with a credit card.

It is possible to deduct work-related education if you itemize. The requirements for this are very specific (see Pub 17) and you and your new laptop would very likely not qualify to take this. Check out the rules though.

Answer 3

Fed does allow you to deduct any education related expenses (up to a maximum). This is tuition, fees, books, pencils, and computers, though they don't count any room & board.

You have the option of filing it out as a deduction (where you deduct it from AGI and calculate your tax afterward) or you can take the lifetime learning credit (where they give a break on the actual final tax amount that you owe). The limit on the deduction is $4,000. The credit is a calculation based on many factors.

The state regulations vary.

Answer 4

You bet! If you've got the receipt then you can claim it. The tax department doesn't care how you paid for something just when you bought it.

Answer 5

Absolutely. Just have a receipt in case of audit.

Answer 6

yes you can jsut keep that reciept for 3 yrs in case they ask for proof.