Tuition and Fees Deduction

Forum|Forum|5 years ago
March 3, 2021
2 replies
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Married filing jointly - taxable income = $151,000. Paid dependent's grad school tuition in 2020. 1098-T Box 1 is $26,439 - received scholarships of $16,981 - net tuition paid = $9458. Already used American Opportunity credits for undergrad. Why do we not qualify for tuition and fees deduction?

MinhT1

You are not eligible for the tuition and fees deduction because you are disqualified by your income.

You are also disqualified for the Lifetime Learning credit.

What are the income limits for Lifetime Learning Credit?

For TY2020, the amount of your LLC is gradually reduced (phased out) if your MAGI is between $59,000 and $69,000 ($118,000 and $138,000 if you file a joint return).
You can’t claim the credit if your MAGI is $69,000 or more ($138,000 or more if you file a joint return).

What are the income limits for the Tuition and fees deduction?

Taxpayers with a 2020 MAGI up to $65,000 ($130,000 if married filing jointly) may claim a maximum $4,000 deduction.

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azenz0789Author

Thanks - I was seeing varying income limits from different sources...that's why I asked.

Hal_Al

Employee

Q. Why do we not qualify for tuition and fees deduction (TFD)?

A. It depends on what you mean by "taxable income = $151,000".

In IRS lingo, "taxable income" is after standard or itemized deductions. That means you adjusted Gross income was over the TFD limit of $160,000 MAGI. Modified AGI incudes some addbacks to AGI. I think the student loan interest deduction is one.

Taxpayers with a 2018, 2019 or 2020 annual modified adjusted gross income up to $65,000 ($130,000 if married filing jointly) may claim a maximum $4,000 deduction.
Taxpayers with a 2018, 2019 or 2020 annual modified adjusted gross income between $65,001 and $80,000 ($130,001 and $160,000 if married filing jointly) may claim a maximum $2,000 deduction.