Are Your Tuition Costs Tax-Deductible?

If you attend a school of higher education, such as a college or trade school, your tuition costs may be tax-deductible. This is a great way for college students to save money on their taxes, particularly if they are working full-time jobs in addition to school, and to recoup some of the monies lost on things like text books and school supplies. Like everything else regulated by the IRS, of course, there are a few stipulations.

The main thing to remember when deciding if your tuition costs are tax-deductible is that any deductions must be necessary. In other words, if the cost isn't required for you to stay enrolled in school, you cannot claim it on your return. Things like student activity dues, Internet access, rent for an apartment and football game tickets can't find their way into your deductions, or you'll be paid a visit by the IRS.

If your tuition costs are tax-deductible, you should also know that you will need to deduct expenses during the calendar year in which they were paid. For example, if you write a check to your university in December for the semester starting in January, you would deduct those expenses in the current year rather than the following one. This can be confusing because you aren't actually starting the semester until the next year, but you have paid for them in this one.

There are also a few personal situations in which your tuition costs are not tax-deductible. For example, married couples who choose to file their tax returns separately are not eligible to deduct tuition and other school costs. The same goes for non-resident aliens who are in the United States on Work or Education Visas, regardless of marriage status. It is important that you determine your eligibility early on so you don't make a mistake.