March 31, 2011 | Stacy Dymalski | 3 Comments There’s no doubt about it going to college is expensive. Whether you attend school in person or you opt for getting your degree online, you still have to pay the same amount in tuition. And no matter what kind of payment plan you’re on that’s a huge chunk of your income. But it doesn’t have hurt all year round. Come tax time, you might be able to get a little bit of that money back if you qualify for certain deductions and tax credits. Granted, you won’t get everything you put into college, but at this point every little bit helps. So if you paid any costs toward college last year or you made payments on a college loan, you’d be smart in checking out these college-related tax tips before you file your income taxes. 1) Work-related Education and Employer-provided Educational Assistance If you went back to school in order to maintain your status at work, then you may be able to deduct your tuition as a business expense under the Work-related Education tax law. To qualify you have to meet the following criteria: A) Your education was required by your employer (or by law) in order to keep your current standing, status, salary, or position at work. B) Your education improves your skill set within your job, or keeps your skill set current with industry standards. These conditions assume that you already have the minimum degree needed to do your current job. You cannot deduct tuition under this tax law if you go back to school to get a degree for a job that you already have or to get a new degree that allows you to switch careers. So basically, we’re talking about Masters or Doctorate degrees here, however, there are unique circumstances where undergrad degrees apply. Check with your tax professional in all cases. 2) Tuition and Fees Deduction If you’re paying for college and you do not meet the requirements of the Work-related Education deduction mentioned above, you can still offset some of your fees under the Tuition and Fees Deduction. For example, you can deduct the following amounts of out-of-pocket tuition fees under certain circumstances: A) $4,000 if your modified adjusted gross income is less than $65,000 ($130,000 if married filing jointly). B) $2,000 if your modified adjusted gross income is between $65,000 and 80,000 ($130,000 and $160,000 if married filing jointly). If you make more than $80,000 filing single (or $130,000 filing jointly) you can’t deduct anything. Nor can you take the deduction (no matter how little you make) if you’re listed as a dependent on someone else’s tax return or if you’re married filing separate. Again, consult your tax professional to clarify your personal circumstances. 3) Deducting Student Loan Interest If you’re making payments on student loans you may be able to deduct up to $2,500 of interest you paid on those loans IF your modified adjusted gross income is less than $70,000 ($140,000 if married filing jointly). To qualifiy your student loan has to meet the following criteria: A) Your loan was taken out solely for the purpose of paying college tuition expenses, including tuition, fees, books, supplies, special equipment, and under some instances certain room and board. B) Your loan is recognized by the U.S. Department of Education as one that participates in the Student Aid Program. Basically any loan you get through your school’s Financial Aid Office qualifies, but again always check with a tax professional before you make any assumptions. With tax time just around the corner it’s best to know the education tax laws. It’s surprising how many students actually leave money on the table when it comes to getting reimbursed for some college expenses. Don’t YOU be one of those people.