There are a lot of costs that go along with attending a college, university, or vocational school. The good news is that many of these costs can be used to help reduce your tax bill. Generally, you can use expenses that you paid for yourself, your spouse, or any dependent that you are claiming on your return.
What Schools qualify?
As long as the school that you paid the expenses to is eligible to participate in a student aid program administered by the Department of Education (which covers virtually all post-secondary institutions), the expenses will generally qualify. See if your school is on the list of accredited schools.
You must have a Form 1098-T from your school listing your qualifying tuition and fees to qualify for an education credit.
Deductions related to the Interest you have paid on student loans:
If you attended a college, university, or vocational school after high school, you may have taken out student loans to help cover all the costs. If those loans are now being repaid, chances are that you are paying interest. If so, you can generally use this interest as an additional deduction on your return.
You can claim the interest deduction if all of the following apply:
- You paid interest on qualified student loan in tax year 2020
- You are legally obligated to pay interest on a qualified student loan
- Your filing status is not married filing separately
- Your modified adjusted gross income is less than a specified amount which is set annually, and
- You and your spouse, if filing jointly, cannot be claimed as dependents on someone else's return
Generally, you should receive a Form 1098-E that reports any student loan interest that you have paid. The amount that you are eligible to deduct is usually the amount in Box 1.
How do I report my student loan interest?
Please follow the steps listed below to report your student loan interest deduction.
- Select Federal from the navigation bar
- Select Deductions from the navigation bar
- Choose to select your forms, then press continue
- Select Adjustment to Income
- Select Student Loan Interest Deduction