The College Tax Breaks Superpage

Updated on January 22, 2009.

WITH COLLEGE COSTS as high as they are, don't miss out on any of the valuable tax breaks that you may qualify for.

Maximum Deduction Amount
For 2009, a $4,000 "above the line" deduction for college expenses paid for you, your spouse or anyone claimed as a dependent on your return. No deduction is allowed for expenses of any person who can be claimed as a dependent on someone else's return. So your dependent college-age child can't claim the deduction when your own AGI is too high to qualify. The $4,000 annual limit applies no matter how many students are in your family.

Good For
College tuition and fees.

AGI Limits
$65,000 (single); $130,000 (married filing jointly); For singles with AGI between $65,001 and $80,000 a reduced deduction of up to $2,000 is allowed; For married couples filing jointly with AGI between $130,001 and $160,000 a reduced deduction of up to $2,000 is allowed; not available for those who are married but file separately.

Other Restrictions
No deduction can be claimed for expenses paid with tax-free withdrawals of earnings from a 529 Qualified Tuition Plan (QTP) or Coverdell Education Savings Account (CESA). No deduction is allowed for years when the Hope Scholarship or Lifetime Learning Credit is claimed for the student in question.

Max. Credit Amount
For 2009, $1,800: 100% of the first $1,200 and 50% of the next $1,200. Credit is taken per student, not per return.

Good For
Expenses relating to the first or second year of college only. Expenses include tuition and fees, such as course-related books, supplies and equipment. Cannot be used for room and board costs.

AGI Limits
For 2009, credit is phased out for singles with AGIs between $50,000 to $60,000; married filing jointly, $100,000 to $120,000. Credit is not available for those who are married but file separately.

Other Restrictions
Can only be claimed for two years per student. Student must be enrolled at least half the time time for at least one academic period during the year. Cannot be used during same year you claim Lifetime Learning Credit for a particular student.

Max. Credit Amount
Twenty percent of qualifying tuition and fees up to $10,000 for a maximum credit of $2,000 annually. Only one credit is allowed per return, even if your family has several students.

Good For
Twenty percent of qualifying tuition and fees, such as course-related books, supplies and equipment. Expenses for graduate work are allowed. Cannot be used for room and board costs.

AGI Limits
For 2009, credit is phased out for singles with AGIs between $50,000 to $60,000; married filing jointly, $100,000 to $120,000. Credit is not available for those who are married but file separately.

Other Restrictions
Cannot be used during same year you claim Hope Scholarship credit for a particular student. Unlike the Hope Scholarship Credit, there are no degree or workload requirements for eligibility.

Max. Deduction Amount
$2,500

Good For
Qualified education loans for you, your spouse or anyone you claim as a dependent. Loans can include those that have been refinanced and consolidated.

AGI Limits
For 2008, deduction is phased out for singles with AGIs of $60,000 to $75,000; married couples filing jointly, $120,000 to $150,000. Deduction is not available for those who are married but file separately.

Other Restrictions
No deduction is allowed if you are claimed as a dependent on someone else's taxes. Loans cannot include educational expenses covered by a Coverdell ESA or an employer educational assistance program.