Tuition and Fees Deduction

By claiming the tuition and fees deduction, you may be able to reduce your taxable income by as much as $3,000 for tuition and fees paid during the tax year. Unlike tax credits, which require that you earn a large enough income to take advantage, the tuition and fees deduction actually reduces the amount of your income that is subject to federal taxes prior to the application of other tax deductions.

The qualified tuition and related expenses that you may apply towards the tuition and fees deduction are those amounts paid in a tax year for enrollment during an academic period beginning any time from January 1 of that year to March 31 of the next year. You cannot claim the tuition and fees deduction if you claim either the Hope or Lifetime Learning tax credits.

Your income level may affect the amount you may claim for the deduction. Any limitation on the amount of the deduction is determined through calculation of the modified adjusted gross income (AGI), calculated as part of completing your tax return. For more information on these levels, click here.

In most cases, the tuition and fees deduction may be claimed by filing either Form 1040 or Form 1040A, known respectively as the long-form 1040 and short-form 1040. If you wish to claim the deduction, you will not be able to do so using Form 1040EZ, "Income Tax Return for Single and Joint Filers With No Dependents."

For more information on claiming the tuition and fees deduction, see IRS Publication 970, "Tax Benefits for Education." Click here to access the publication.