Previous Page: Publication 970 - Tax Benefits for Education - Who Can Claim a Dependent's Expenses Next Page: Publication 970 - Tax Benefits for Education - Claiming the Deduction Use   to find additional instances of index items.

Taxmap/pubs/p970-030.htm#TXMP2f5561a8 Figuring the Deduction

Deduction

The maximum tuition and fees deduction in 2004 is $4,000, $2,000, or $0, depending on the amount of your modified adjusted gross income (MAGI). See Effect of the Amount of Your Income on the Amount of Your Deduction, on the next page.

Taxmap/pubs/p970-030.htm#TXMP3050fe74 Form 1098-T.

To help you figure your tuition and fees deduction, you should receive Form 1098-T. Generally, an eligible educational institution (such as a college or university) must send Form 1098-T (or acceptable substitute) to each enrolled student by January 31, 2005. An institution may choose to report either payments received (box 1), or amounts billed (box 2), for qualified education expenses. In addition, your Form 1098-T should give you other information for that institution, such as adjustments made for prior years, the amount of scholarships or grants, reimbursements or refunds, and whether you were enrolled at least half-time or were a graduate student.

The eligible educational institution may ask for a completed Form W-9S, Request for Student's or Borrower's Taxpayer Identification Number and Certification, or similar statement to obtain the student's name, address, and taxpayer identification number.

Taxmap/pubs/p970-030.htm#TXMP123f0ad1 Effect of the Amount of Your Income on the Amount of Your Deduction

Effect of the Amount of Your Income on the Amount of Your Deduction

If your modified adjusted gross income (MAGI) is not more than $65,000 ($130,000 if you are married filing jointly), your maximum tuition and fees deduction is $4,000. If your MAGI is larger than $65,000 ($130,000), but is not more than $80,000 ($160,000 if you are married filing jointly), your maximum deduction is $2,000. No tuition and fees deduction is allowed if your MAGI is larger than $80,000 ($160,000).

Taxmap/pubs/p970-030.htm#TXMP2e8d1b8f Modified adjusted gross income (MAGI).

For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return.

Taxmap/pubs/p970-030.htm#TXMP543bdaf1 MAGI when using Form 1040A.

If you file Form 1040A, your MAGI is the AGI on line 22 of that form, figured without taking into account any amount on line 19 (Tuition and fees deduction).

Taxmap/pubs/p970-030.htm#TXMP1d90fa57 MAGI when using Form 1040.

If you file Form 1040, your MAGI is the AGI on line 37 of that form, figured without taking into account any amount on line 27 (Tuition and fees deduction) and modified by adding back any:

1. Foreign earned income exclusion,
2. Foreign housing exclusion,
3. Foreign housing deduction,
4. Exclusion of income for bona fide residents of American Samoa, and
5. Exclusion of income from Puerto Rico.

Table 6-2 shows how the amount of your MAGI can affect your tuition and fees deduction.

You can use Worksheet 6-1 to figure your MAGI.

Previous Page:  Publication 970 - Tax Benefits for Education - Who Can Claim a Dependent's Expenses Next Page:  Publication 970 - Tax Benefits for Education - Claiming the Deduction Use     to find additional instances of index items.