Question about deducting tuition expenses for my taxes?

Question

Last year I made about $14,000 working part time while in school. My father makes alot of money and because of this he doesn't receive any tax credit to pay for my education. So what he does is gives me the money from his bank account and I pay for my schooling. My tuition alone last year was over $11,000. Also i spent $648 dollars in student loan interest. I also purchased a car this year as well. So I was told I can deduct the sales tax on my car.

Basically what im asking is that can I deduct the car sales tax, tuition expenses, student loan interest from my earnings even though it probably exceeds what I made last year. Before this year I worked and saved alot of money to go to nursing school since I knew it was going to be expensive. Any help is much appreciated.

well i don't know if im a dependent or not. I believe so cause my father uses me for his health insurance at work since im a full-time student

Answer 1

Sales tax for the car can be deducted on Schedule A if you otherwise itemize deductions (if th car sales tax is all you have, then you should use the standard deduction).

If you were under age 24 at the end of tax year 2006, and a full-time student, then your father can claim you as a dependent. Even if he chooses NOT to claim you, you would not be entitled to claim yourself.

If you qualify to claim yourself, you would figure the amount of the Hope or Lifetime Learning Credit on Form 8863.

If dad claims you, he can use the amount of your tuition as an adjustment to income.

Answer 2

First of all, if your father can claim you as a dependent, you can't take education credits for yourself.

Assuming that you can NOT be claimed as a dependent, then yes, you could take the tuition and fees deduction - but check into whether the Lifetime Learning credit would be better for you, or the Hope credit if you are in your first two years of post-secondary education. Since the deduction for tuition and fees would probably save you only $400, the credits would probably by better for you.

You could also take the deduction for student loan interest. The deductions can only be used to reduce your income, not to take it lower than zero.

The limit on what you can deduct is $4000 of the tuition and fees, not the whole amount you paid. That plus your standard deduction and exemption would take your taxable income very low, but not wipe it out completely.

You can only deduct the sales tax paid on your car if you itemize, and if you choose to deduct sales tax rather than state and local income tax - in that case, you could add the sales tax on the car to the amount in the table for allowable sales tax deduction for your state, income level and household size. So for the sales tax on the car, while the answer is a qualified yes, you can deduct it, it's unlikely that you would be able to.

Answer 3

You can deduct tuition or take education credits on your tax return as long as you are not claimed as a dependent on another return. From your question, it appears that you will be claiming yourself.

You can eliminate any tax owed by taking the Hope or Lifetime Learning Credit. You do not need a student loan interest deduction, although you can take it. If you can defer the interest payments, do so until you can get a tax benefit from them.

There is no tax advantage to itemizing deductions on Schedule A, so the sales tax on the car is not going to benefit you.

Added later: If your father can claim you as a dependent, but he does not claim you, you can still take the Hope or LLC, but not the Tuition and Fees deduction. See Pub 970 page 13.

If your father claims you, then unfortunately you cannot take any of the education benefits. You will owe about $600 in tax.

Answer 4

sure, there are desire and lifelong attending to understand credit available. sure, you may write off activity you've paid. See a tax specialist. There are alot of sites that take care of this. attempt Yahoo Finance and money.aol-- speedier Tax also has options in this topic.