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I am currently in a masters program. I pay $8400/ year for tuition. My employer remiburses up to $5000/year. Therefore, I am paying a net cost of $3400 out of pocket. Can I claim the $3400 as a tax deduction? No one claims me as a dependent.

2007-09-27 04:06:22 · 3 answers · asked by Scotty H 3 in Business & Finance Taxes United States

3 answers

You can claim either Lifetime Learning Credit or Tuition and fees deduction. But both are subject to income limit phase-outs, and since I don't know your income, I can't tell you whether you'll be able to get either one. Lifetime Learning Credit should be the better of the two to take, but don't know your situation.

2007-09-27 04:09:57 · answer #1 · answered by Anonymous · 1 0

There are three ways to do this

1. The Lifetime Learning Credit. If your AGI is below the cutoff (55K not married, $110K married) you can get a 20% credit of your tuition, or a $680 reduction in your taxes.

2. The Tuition and Fees Deduction. If your AGI is less than $65K ($130K if married), you can deduct $3400 from your gross income.

The AGI above may be modified in cases such as foreign income.

3. If your education is work-related, you can add together the $3,400 of tuition, plus your books, supplies, transportation costs to school, and include them on Schedule A as unreimbursed employee expenses. You will be able to deduct the excess of 2% of your AGI.

Depending on your tax bracket,AGI, and other Schedule A deductions, you have to figure which way is best for you.

2007-09-27 05:18:52 · answer #2 · answered by ninasgramma 7 · 1 0

You can take the Lifetime Learning credit for part of your out of pocket expenses. You might have the option of claiming it as an unreimbursed employee business expense instead, but the credit would probably give you more tax savings - check which would be better for you if you can claim it either way.

2007-09-27 04:44:18 · answer #3 · answered by Judy 7 · 2 0

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