Taxpayer Eligibility

• Eligible taxpayers may deduct up to $4,000 of the qualified expenses an eligible student incurs to attend school provided the student does not receive reimbursement from an employer. To qualify, your tax return filing status may not be married filing separately, another taxpayer must not be eligible to claim you as a dependent, you must have adjusted gross income of $80,000 or less before taking the education deduction into account and you cannot claim a different educational tax benefit for the same student during the tax year. Additionally, you must pay the tuition and fees for an eligible student. The IRS treats taxpayers who pay tuition and fees with student loan funds as paying the expenses for an eligible student provided they are legally liable for repayment of the loan. Eligible students include yourself, a spouse and any dependent who you claim as a dependent on the tax return.
  
  

Qualified Expenses

• It is not necessary that an employer require the student to attend an educational institution. The program you attend may remotely relate to your profession and will still be eligible for the deduction. When you calculate the deduction amount, you may only include the tuition and fees the institution requires you to pay as a condition of enrollment. You cannot deduct the cost of books and supplies unless the program requires it and payment is made directly to the institution for those items.
  
  

Miscellaneous Deduction

• If you do not qualify for the $4,000 tuition and fees deduction, you may be eligible to claim a deduction for work-related education as a miscellaneous deduction. To qualify, the education must be a requirement of an employer necessary to maintain a salary, status or job. If you pursue the education voluntarily, its purpose must be to maintain or improve skills for a current profession. If, however, the education provides you only with the minimum skills to enter a profession or trains you to enter a new profession upon completion, a deduction is not available.
  
  

Reporting

• Claiming the cost of education as a miscellaneous deduction requires you to report it on the Schedule A attachment to IRS Form 1040 as an itemized deduction. Although there is no limitation on the amount of educational costs you can deduct, your total miscellaneous deductions for the year are only deductible on the portion that exceeds two percent of adjusted gross income. If you take the $4,000 tuition and fees deduction, the IRS requires you to provide full details of all educational costs on Form 8917. You must also report the deductible amount on the first page of a personal income tax return.