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Deduction Allowed for Qualified Tuition and Related Expenses

A tax deduction toward adjusted gross income (AGI) is allowed for qualified tuition and related expenses paid during the taxable year, limited to:

• $4,000, if your AGI does not exceed $65,000 ($130,000 for a joint return);
• $2,000, if your AGI is between $65,001 and $80,000 (between $130,000 and $160,000 for a joint return); or
• $0, if your AGI is more than $80,000 (more than $160,000 for a joint return).

Which educational expenses are covered?

Qualified tuition and related expenses include the costs for attending a degree-granting post-secondary institution (i.e., college), but do not include costs for room and board, student activity and athletic fees, books, equipment, insurance, transportation or other personal living costs.

How does the deduction work?

This deduction is available on a per-student basis. For example, if you are the parent of 18-year-old triplets who will begin college in fall 2008 and each student has qualified education expenses of $10,000, you can deduct up to $4,000 for each student ($12,000 total) on your personal return if your AGI does not exceed $65,000 ($130,000 for a joint return).

This deduction is not allowed for a taxpayer eligible to be claimed as a dependent by another person, whether or not actually claimed.

For more information, contact Mike Calahan at 312-980-2996 or Tara Wells at 312-980-3277 for more information.

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.