August 15 2016
Parents everywhere are breathing a sigh of relief as their children begin the new school year, but due to the rising cost of education, the relief can be short-lived. We've compiled a few of the most common questions our clients have regarding education-related tax deductions.
1. Private or parochial school tuition is NOT tax deductible, however, a portion of the cost of private school for children up to age 13 may be deductible IF you can separate the cost of the education expense from the child care component.
2. They make the morning routine run a bit more smoothly, but uniforms are NOT deductible, even if they are required.
3. Up to age 13, before- and after-school care may be deducted if it is a qualifying expense.
4. Purchases made for a fundraiser, such as wrapping paper and popcorn, can be deducted, but you'll need to reduce your deduction by the market value of any goods bought in return for the donation. Raffle tickets, even those purchased for a fundraiser, are NOT deductible.
5. Because going to college doesn't qualify as a job, the IRS does NOT allow deductions for moving expenses.
6. The IRS does not tax 529 earnings, and as long as withdrawals are used for eligible college-related expenses, they are not taxable either.
7. Student loan interest is usually deductible as long as you don't have to itemize in order to claim the deduction. This is commonly called an above the line deduction.
If you have school-related tax questions, contact us.
Get In Touch