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Through 2011, taxpayers are allowed up to a $4,000 above-the-line deduction for qualified higher education tuition and related expenses. Unless extended by Congress the deduction will no longer be available after 2011.
Taxpayers are allowed an above-the-line deduction for qualified tuition and related expenses for the year, to the extent the expenses are in connection with enrollment at an institution of higher education during that tax year, or if those expenses are in connection with an academic term beginning during that tax year or during the first 3 months of the next tax year.
The deduction is limited both by filing status and AGI. Unlike the other education tax incentives where the deduction is slowly phased out, this deduction is not allowed once the AGI limit is reached. Married individuals who file separately and taxpayers who are claimed as a dependent of another are not allowed to take this deduction. .
Since the expenses that qualify for this deduction are the same as those that qualify for the education credits, taxpayers may qualify for both and will be required to choose between the two. Each taxpayer’s individual circumstances must be taken into consideration before making the most beneficial decision. This office can assist you in making an informed choice.
While the tax or legal information provided is based on our understanding of current laws, and has been gathered from sources believed to be reliable, it cannot be guaranteed. Federal tax laws are complex and subject to change. This information is not intended to be a substitute for specific individualized tax or legal advice and should only be relied upon when coordinated with individual professional advice. Neither FSC Securities Corporation, nor its registered representatives, provide tax or legal advice. As with all matters of a tax or legal nature, you should consult with your own tax or legal counsel for advice.