Small Business Taxes For Dummies by Eric Tyson

Author:Eric Tyson
Language: eng
Format: epub
ISBN: 9781119517832
Publisher: Wiley
Published: 2019-02-27T00:00:00+00:00

With these rules, high-income taxpayers may be able to do better with home equity loans, although interest on loans secured by your home whose proceeds are used to pay non-home related expenses isn’t deductible under the alternative minimum tax. You may want to check with a tax advisor before you head down this road.

Line 34: Tuition and fees

For 2018, Congress has extended the tuition and fees deduction, which allows you to deduct up to $4,000 of qualified tuition and fees paid to an eligible educational institution of higher education for yourself, your spouse, or your dependent. You may not claim this credit if you’re already claiming an American Opportunity or Lifetime Learning Credit for the same student (see the later section “Line 50: Education credits”), and you may not file as married filing separately. Tuition paid for part-time students qualifies; however, income limits apply. The deduction is eliminated for single taxpayers who earn more than $80,000 and for married-filing-jointly taxpayers who earn more than $160,000.

Sport, hobby, and noncredit courses don’t qualify for the deduction, unless the course is required as part of a degree program or you take it to improve job skills. If someone else can claim you as a dependent on his return, you can’t claim the deduction. As a result, if your income prohibits you from claiming the deduction, your child on whose behalf the expense was incurred can’t claim the deduction either.

This higher education deduction, which you can claim even if you don’t itemize your deductions, enables taxpayers to deduct education expenses without having to substantiate that those expenses are job-related. You can claim education expenses above $4,000 as a miscellaneous itemized deduction if they’re employment-related.

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