Taxes - How do you file partial deductions?

Question

I read that you "can deduct as much as $4,000 in qualified tuition" and that "partial deductions are available to individuals with income up to $80,000 and couples with income up to $160,000"

I fall in this category, but don't know how to file partial deductions. I normally use Turbo Tax but I have never seen an option for partial deductions.

If you know how to file this I would really appreciate a hand.

So, once you know the limit, how do you file the partial deduction?

Answer 1

If you want to take the tuition and fees deduction, you can deduct the full amount (up to $4,000) if your AGI (with some modifications that do not apply to many) is $65,000 or less. If your MAGI is $65,001 to $80,000, you can deduct $2,000. For a MAGI greater than $80,000 there is no deduction.

Your tax software can handle this, or if you do it by hand, you figure your deduction on Form 8917 and transfer it to Form 1040.

http://www.irs.gov/pub/irs-pdf/f8917.pdf

Answer 2

These are known as phaseouts. Turbo tax will automatically calculate the amount--you put in the total tuition and Turbo tax will do the rest. When you print out the tax return you can look through it to see what limits you hit.

That's the whole point of using software. It takes the full amount and does the worksheet for the phaseout behind the scenes. You don't have to do the worksheet yourself. when you are hitting all the screwy math, *that's* when it's worth the money to buy software.

Answer 3

Good advice from vb and Judy, but also look at Education Credits, 1040 line 49. You may be able to take either the deduction or the credit (not both), and the credit is more beneficial for most people.

Answer 4

TurboTax should handle cutting the amount down as required, since it will have all of your income information to know what you are eligible for. Just enter what it asks for and it will take care of it.