Guide to Form 8917 Tuition and Fees Deduction
With a good portion of the population out of work, many folks are headed back to school to retrain or relearn important skills. Additionally, 70.1% of all kids who graduated high school in 2011 are now off to college. That means there's a massive influx of students eligible for a $4,000 deduction if they take 3 minutes to fill out this form.
Parents listen up!
Form 8917 (entitled Tuition and Fees Deduction) is for any student who enrolled at an eligible educational institution. That means you, your spouse, or your dependent child. Sadly, it does not yet include pets, so any doggy classes for Fido are out.
A qualified education expense would include enrollment and tuition fees. But, the costs of books, board, food, insurance, transportation, medical expenses, or any non-credited course (such as an athletic class or hobby) are not to be included in this deduction. So basically, that fat check that's due every semester counts, while the 15 hamburgers, 14 milkshakes, and 100 lbs of fries that your kid devoured in the cafeteria do not.
You also will not be able to claim this deduction if your modified adjusted gross income or MAGI is more than $80,000 ($160,000) if filing jointly. If another person can claim you as an exemption (or a dependent) don't bother with this form. If you're married but file separately or if you're a nonresident alien, this form is not for you. And lastly, if you already put in for a lifetime learning, American opportunity, or hope credit, you are not allowed to double count this deduction.
Before you start the main form take a couple minutes to fill out the qualified education expense worksheet on page 3. Start by adding all your qualified education expenses on Line 1. Adjustments like tax-free educational assistance, refunds on qualified education expenses, and refunds received in 2011 go on Line 2. Now add these up and enter the total on Line 3. Subtract Line 3 from Line 1 to get your net expense. Then enter this expense on Line 4 and on Line 1 (Column C) of the main form.
As with all these supplemental forms, be sure to include your name and social security number at the very top. Next, put the student's name, social security number, and all qualified expenses on Line 1 columns A, B, and, C. Now add the amounts on Line 1 and enter the total on Line 2. Line 3 is looking for your total income. If you don't know it, you can get the number from Line 22 of you 1040 or Line 15 of your 1040A.
Line 4 is for any expenses that don't have to do with tuition or student loan interest. Just add Lines 23 through 33 of Form 1040 or Line 16 to 18 from your 1040A to figure it. Now subtract those expenses from your total income and enter the total on Line 5. Importantly, if that result is more than $80,000 ($160,000 if filing jointly) you cannot get this deduction.
The last hurdle is simply to figure the amount of your deduction. If Line 5 is more than $65,000 ($130,000 if filing jointly), you get half of the max (a smooth $2,000) or the amount on Line 2 (whatever is smaller). But if that total is less than $65,000, you get the full $4,000 deduction or Line 2 (again, whatever is smaller). To finish up, just enter that number on Line 6. Just don't forget to also enter it on Line 34 of your 1040 or Line 19 of your 1040A.
Fin
Provided you don't make too much money, the tuition and fees deduction is one of the best in the tax code. It's so simple that in the time it takes for your student to devour a pizza, you'll be able to complete this document. So while IRS Form 8917 won't cover an appetite, it will reduce your income by up to $4,000. And with the rising price of higher education, that deduction can help buy a lot of groceries.
