Are college expenses like room and board tax deductible?

June 25, 2014 by Dave Du Val, EA
stacked books, diploma, and graduation hat

Hey Dave,

We adopted our grandson three years ago - he is now a freshman in high school. When he goes to college, will his tuition be tax deductible? Any other college expenses, like room and board?

Alex

 

Alex,

You are very smart to start planning now!  Your grandson’s eligible expenses may qualify you for an education credit or deduction if you meet all of the requirements. The one that usually provides the biggest tax break is the American Opportunity Credit (AOC). Qualified expenses for the American Opportunity Credit include tuition at an eligible institution, books and required supplies, but not room and board, medical expenses, insurance, etc. There are currently income limits of $180,000 for married taxpayers filing jointly, and $90,000 for those using the single, head of household, or qualifying widow(er) statuses.

An eligible educational institution is a school offering higher education beyond high school. It is any college, university, vocational school, or other post-secondary educational institution eligible to participate in a student aid program run by the U.S. Department of Education. This includes virtually all accredited public, nonprofit and privately-owned–for-profit post-secondary institutions. Here’s a link to help you determine if you qualify for the AOC.

There are other education credits and deductions, each with its own rules. To determine which one would be most beneficial for you, we would recommend that you review IRS Publication 970, Tax Benefits for Education.

 

Deductibly Yours,

Dave

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Rhonda D. Guillory, EA
Learning and Development Manager

 

Rhonda was a Seasonal Tax Return Reviewer at TaxAudit before joining the permanent staff as an Audit Representative in 2009. She has a Bachelor of Science in Computer Science and worked in the Information Technology field for 15 years before making a career change. Since transitioning to the field of income tax in 2003, she has prepared and analyzed hundreds of tax returns. Rhonda enjoys helping taxpayers and tax professionals learn and understand the fascinating world of income taxes. Currently, she is the Learning and Development Manager.


 

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