Daughter's educational expenses.

Steven Michelsen asked me to post this for him. My daughter is going to college. In 2009 I contributed about my regular checking acct, to help pay for it. Most of that went directly to the school for tuition, and some went to her, to help cover her off-campus living expenses. Can I deduct any of this? How?

(She also took out a loan, and the school also gave her a scholarship. All three sources covered her total bill.)

Thanks! Steven Michelsen

Reply to
Dick Adams
Loading thread data ...

Assuming she is your dependent, any tuition, books, related fees and similar items, but not room & board, that you made or she made or great grandma made for her, maight wualify for an American Opportunity Credit if the other AOC rules are met.

I'm assuming she is in an undergraduate program, at least half time.

Loans that have to be repaid count towards tuition etc payments.

Scholarships/grants that do not have to be paid back reduce the school costs that are used to calculate the credit, and if some of the scholarships/grants were not used to pay tuition etc, that can actually become taxable income, to be reported on Form 1040 line 7.

Reply to
Arthur Kamlet

Yes, there are tax breaks available. See publication 970 at

formatting link
However, there are phaseouts --if your income is too high you get no credit or deduction. Only the tuition would be deductible. The off-campus or on-campus living expenses are not deductible. Special for 2009, amounts paid for course materials (ie. books) are also deductible. However, if the tuition is very high, you get the maximum credit or deduction, and the extra amount paid for books doesn't matter.

If your income is so high that you don't qualify for any deductions or credits, then your child can claim the credit on her own tax return (even though you paid it) if though she does not claim herself as a dependent. If she had a part time job, this might be handy (as it means she owed tax but the credit will possibly wipe out the tax). In any case, part of the American opportunity credit is refundable, meaning that if your tax is zero you get money back, sort of like a stimulus check.

As for the student loan interest, only the person who is legally responsible for paying it can deduct the interest.

You didn't say what state you're in. California does not recognize the education credits and deductions, but it does recognize the student loan interest deduction.

Finally, did you receive a 1098-T from the college? It should state the value of the tuition. People on this newsgroup say that it is often inaccurate, so you should rely on your own records.

Of course, the university must be a qualified university. If it's in another country, it's probably not qualified, but I'd have to look into this.

Reply to
removeps-groups

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.