Is the federal tax deduction still available for parents with kids in college?

Answer 1

If you are claiming these kids on your tax return, you will benefit from additional exemption ($3300 per person).

There are 3 places on federal tax return where you can possibly account for the money spent on their education: Hope Credit, Lifetime Learning Credit and Tuition and Fee Deduction. You will have to do some calculations to determine which is the best choice for each kid (tax software might be handy for this). Check out http://www.irs.gov/publications/p970/index.html for more information.

FYI. Tuition and Fee is one of the last minute changes to 2006 tax rules. IRS is not ready to accept returns claiming Tuition and Fee Deduction yet (Possibly mid Feb). Tax software do not yet have updates to handle them either. Wait until you get the latest updates in Feb before attempting to figure out Tuition and Fee deduction.


Best wishes.

Answer 2

yes the deduction and credit are still available. However if you opt for the deduction you cannot claim the credit and vise versa. If you do choose to go with the deduction you will have to wait until February 5 to claim this deduction for there was a delay in congress in extending many tax credits and deductions.

Answer 3

yes it is. He can only be counted once as an exemption. So the child has to claim himself or the parent can claim him on the form, but both parent and child can't claim the exemption in the same year.

Do the math and see who it helps out the most.