Wife (who lives in Canada) is taking junior college courses to possible switch careers. We are MFJ. My AGI is about $120K and hers about $65K.
Can we get any help? It seems like the American Opportunity credit might not exclude us due to income, but that applies only to degree programs, and she's not in one. Lifetime Learning and Tuition Tax Deduction phase out below our income.
Is there anything we can get a break for?
Nothing I can think of, but double check in Publication 970.
Phil Marti VITA/TCE Volunteer Clarksburg, MD
The AOC is phased out:
Effect of the Amount of Your Income on the Amount of Your Credit
The amount of your American opportunity credit is phased out (gradually reduced) if your MAGI is between $80,000 and $90,000 ($160,000 and $180,000 if you file a joint return). You cannot claim an American opportunity credit if your MAGI is $90,000 or more ($180,000 or more if you file a joint return).
She could switch careers and then start taking classes. If she does this then the expenses are either business training expenses or employee training expenses, for advancing your career, which are deductible on Schedule C for Schedule A. The Schedule A deduction is limited -- only the amount greater than 2% of your AGI is deductible, and it is not allowed under AMT.
Before looking for a 2% deduction, why not see if income allows an above the line Tuition & Fees Deduction?
True, but original post said tuition and fees is phased out completely for them.
I'll assume that if she lives in Canada, she is taking classes in Canada. In order to be eligible for any of the higher ed credits or the adjustment to income, the school she is attending has to be a participant in the U.S. Department of Education?s Federal Student Aid (FSA) program. According to fafsa.ed.gov, there are 91 schools in Canada eligible. A quick glance tells me that they are all 4 year colleges. Therefore, assuming her college fails the test, then training for a new career would not be eligible for any other higher ed benefit.
taking junior college courses to
Yes, I missed the part about her living in Canada. However, I think deducting as a business or employee expense (but only once you've switched careers) is still allowed even the college does not qualify.
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