Tuition and Fees Deduction

As the proud parent of one child attending a frightfully overpriced undergrad institution, I am eyeing the "Tuition and fees deduction" on line 34 of my 1040, as established by completing form 8917. My son's tuition, fees and expenses is paid through the following items: (i) some financial aid (ii) student loan, (iii) Texas Tomorrow Fund (a pre- paid tuition plan), and (iv) my hard earned money. When I review form

8917 I establishes that room and board is not a "qualified education expense". My son's college lumps all the tuition/fees and the room and board together, and once the dough from items (i) through (iii) has been applied, I get a bill for the rest. The point is, there is no way to "know" whether my out-of-pocket expense (my payment to the school) have gone to pay "qualified education expenses" or room and board. Has Congress given me, in the line 34 deduction, yet another impractical, and ultimately, useless deduction?
Reply to
FreddieFarkle
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Assuming we are dealing with a qualified educational institution (they participate in the Dept. Of Education Student Aid Program and that's just about every accredited public, nonprofit, and private post-secondary institution) they are obligated to prove the student and the IRS, Form 1098-T that reflects the tuition and related expenses. Related expenses do not include room and board. In addition, I have yet to run across any college that has not provided this break out when asked.

Reply to
Alan

On Mon, 17 Mar 2008 23:13:00 EDT, FreddieFarkle wrote Re Tuition and Fees Deduction:

The school should provide you with a 1099-T which shows the qualified expenses. If you haven't yet received one, give them a call.

Reply to
Vic Dura

I received an e-mail from the OP (bad etiquette) that doesn't appear on the newsgroup. Here's the e-mail and my public response.

Your original question dealt with your inability to determine what represented qualified expense and what represented room and board. You are now requesting an answer to an entirely different question. I.e., your inability to determine who paid what.

My understanding of the process is that whenever you or some other entity pay for higher education expenses any amount that is so designated as paying for room and board would not be a qualified ed. expense for the T&F deduction or either of the ed. credits. Any payment coming from a QTP or out of tax-free assistance and designated as paying for room and board would not be qualified expenses. If the payment is not so designated, then the IRS requires you to apply the payment first to tuition, fees & related expenses and then to the unqualified expenses. (Don't ask, I don't have a citation.)

As an example: If the Texas plan that allows for payment of reasonable room and board is sent to the college and the payment has no designation as to what part of the student's cost is being paid, then it must first be applied to tuition, fees & related expenses and then any excess would be applied to room and board. The same rule would hold for payments you made.

Lastly, qualified education expenses paid with the proceeds of a loan is deductible or eligible for the credit. Payments sent directly to the school from a third party are considered paid on the day the school credits the account.

Reply to
Alan

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