Saturday, March 5, 2011

Where is my Tuition Deduction?

Q.  I am at a loss as to how to take the deduction for tuition and fees on my tax return. Form 8917 won't transfer to my 1040. I finally gave up and gave it to my daughter, but she says she can't use it because we take her as a dependent. What are we doing wrong? DE, Illinois

A.  Most likely you aren't doing anything wrong. In my practice, I find that most parents both work today, and with a Adjusted Gross Income in excess of $130,000 you start to lose the deduction. At an Adjusted Gross Income level of $160,000, the deduction is totally lost. If your Adjusted Gross Income is at or below $100,000 you may realize more benefit by trying the American Opportunity or Lifetime Learning Credits. Usually a credit will benefit you more than a deduction.

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