Thus, if the Longs can't qualify for the AOTC (say, they've already used it for their child for four years) or for the Lifetime Learning Credit (their income is just over the Lifetime Learning Credit threshold), they may be able to benefit from the tuition and fees deduction
Therefore, the maximum federal income tax saving with the tuition and fees deduction is $1,000: 25% of $4,000.
If your income is just a little too high to meet the requirements for the Lifetime Learning credit and you spent money for education at an accredited institution, you may be able to use the tuition and fees deduction.
This adjustment to income is claimed using Form 8917, Tuition and Fees Deduction, attached to Form 1040 or 040A.
In addition, a taxpayer cannot take an education credit from Form 8863, a business deduction for work-related education expenses (see below), and the tuition and fees deduction from Form 8917 for the same student for the same tax year.
If a taxpayer in the 15% tax bracket has the choice of taking a $1,000 tuition and fees deduction
for educational expenses or a $300 Opportunity credit, the taxpayer would be better off taking the $300 credit to reduce any taxes owed, because the deduction will result in a savings of only $150 ($1,000 x 15%) in taxes.
Taxpayers who elect to use the tuition and fees deduction cannot use the Lifetime Learning Credit.
Distributions from a 529 plan impact the ability to take the Hope Scholarship or Lifetime Learning Credit, as well as the tuition and fees deduction.
Negative amount is $5,000 available for education credits or tuition and fees deduction
The tuition and fees deduction allows a taxpayer to deduct as much as $3,000 from his or her taxable income for tuition and fees paid for the taxpayer, his or her spouse, or his or her dependents.
The qualified tuition and related expenses that may be applied towards the tuition and fees deduction are those amounts paid in 2002 for enrollment during that year or for an academic period beginning any time from Jan.
In most cases, both the student loan interest and tuition and fees deductions may be claimed by filing either Form 1040 or Form 1040A, known respectively as the long-form 1040 and short-form 1040.