<p>I am in the midst of doing our taxes and I have a question that probably everyone here knows the answer to:</p>
<p>Can any of this stuff be included as “education” expenses? I’m thinking of:
SAT test fees
AP test fees
college application fees
anything else I’m not thinking of but probably paid for in 2005???</p>
<p>I’m guessing not, but hey, can’t hurt to ask right? </p>
<p>thanks :)</p>
<p>I’d like to know that answer as well.</p>
<p><a href=“http://www.irs.gov/publications/p970/[/url]”>http://www.irs.gov/publications/p970/</a></p>
<p>You may to check the publication listed above. I do not think that any of the fees you mentioned are deductible as Qualified Education Expenses.</p>
<p>negative, since those fees are not associated with a “course of instruction” nor other education…unless, you feel that taking SAT tests has intrinsic educational value…LOL</p>
<p>This if from the irs link xiggi provided:
</p>
<p>then it goes on to say if you could buy books somewhere else (amazon or whatever, I assume) that you can’t include them.
But since schools REQUIRE an app fee and many REQUIRE the SAT or ACT, then I wonder why can’t those be included?</p>
<p>bcos they are not “course related…” nor are they related to “attendance”… but, if you want to be an agressive filer, you might TRY to make a case for the SAT fee and the app fee bcos they are connected with “enrollment”, but, only for the ONE college your child will attend.</p>
<p>next year, the college your child attends will send out a Form 1098T which will identify the amount that is deductible.</p>
<p>“next year, the college your child attends will send out a Form 1098T which will identify the amount that is deductible.”</p>
<p>BB, I am afraid that the 1098T will not do that -at least not for all schools </p>
<p>I just received my 1098T and the school did list only the payments it received or billed directly. This means that ancillary expenses such as books and indirect fees are NOT listed, but still deductible. Could it be possible that the schools do this to allow some creativity for books? :D</p>
<p>Well, I had a nice surprise when I received a 1098T yesterday – my daughter enrolled in an online UC extension course in December for $500, but she’s done no work for the course. (She has a year to complete and its self-paced - she is supposed to mail in assignments to the instructor as completed). So I was griping at her earlier about it, then voila, open the mail and I see I’ve got a $500 write off. OK, daughter foregiven. </p>
<p>Anyway, I think if you want to be safe, then you should claim numbers that show up on the 1098T and leave it at that. </p>
<p>I was audited once by IRS, and once they audit they go over everything in the return in great detail – discrepencies between various tax reporting documents they receive and amounts you claim are probably the type of things that trigger the audits and the questions. So aside from what you can “technically” get away with – for which the answer is, “I don’t know” … I wouldn’t fool around.</p>
<p>xiggi:</p>
<p>…not according to Ex. 2 in Pub 970 (which you posted)…</p>
<p>Example 2.</p>
<p>Donna and Charles, both first-year students at College W, are required to have certain books and other reading materials to use in their mandatory first-year classes. The college has no policy about how students should obtain these materials, but any student who purchases them from College W’s bookstore will receive a bill directly from the college. Charles bought his books from a friend, so what he paid for them is not a qualified education expense. Donna bought hers at College W’s bookstore. Although Donna paid College W directly for her first-year books and materials, her payment is not a qualified education expense because the books and materials are not required to be purchased from College W for enrollment or attendance at the institution. </p>
<p>However, if you are on full ride, you maybe able to claim books, etc., as an offset against incurring the “income”, but I’ve never looked at that part of the code, so just guessing.</p>
<p>DrDrewsmom:</p>
<p>only if the fees and expenses must be paid to the institution as a condition of enrollment or attendance.</p>
<p>You don’t pay the SAT fees to the insitution, you pay to College Board. </p>
<p>The application fee is not a condition of enrollment or attendance, it is tied only to the application. Since the application is no guarantee of admission, it is not a condition of enrollment/attendance. It is a condition of something else (i.e., being considered for possible future enrollment/attendance). In any case, even if you could argue that college A’s application fee was a “condition” of enrollment, that argument would only run to the college that the student actually attends – there is no possible justification for arguing that application fees to colleges that reject, defer, or waitlist your kid, not to mention the ones that you choose not to attend. So basically you <em>might</em> have a leg to stand on for an ED application fee, assuming kiddo was admitted. </p>
<p>I think an ED or rolling admissions deposit made before year’s end would be deductible, since the deposit is credited to to tuition.</p>
<p>BB, the definition of qualified education expense vary depending on the section of fhe code. </p>
<p>If you check page 6 of the publication 970, you’ll see that table 1-1 provides a slightly different interpretation than the section related to the Hope credit. </p>
<p>Why there are different interpretation is beyond my understanding, but it reinforces the need to stay well within the section that is applicable to your situation. </p>
<p>PS The deduction I will take is indeed against scholarship income. I will still have well over 5 digits of taxable scholarship income. Uncle Sam will gets its share. :)</p>
<p>Forgot to add the link to the interpretation for Sec 529. For this section, room and board are qualified expenses. </p>
<p>From <a href=“26 U.S. Code § 529 - Qualified tuition programs | U.S. Code | US Law | LII / Legal Information Institute”>26 U.S. Code § 529 - Qualified tuition programs | U.S. Code | US Law | LII / Legal Information Institute;
<p>TITLE 26 > Subtitle A > CHAPTER 1 > Subchapter F > PART VIII > § 529 </p>
<p>§ 529. Qualified tuition programs</p>
<p><a href=“3”>quote</a> Qualified higher education expenses
(A) In general
The term qualified higher education expenses means
(i) tuition, fees, books, supplies, and equipment required for the enrollment or attendance of a designated beneficiary at an eligible educational institution; and
(ii) expenses for special needs services in the case of a special needs beneficiary which are incurred in connection with such enrollment or attendance.
(B) Room and board included for students who are at least half-time
(i) In general In the case of an individual who is an eligible student (as defined in section 25A (b)(3)) for any academic period, such term shall also include reasonable costs for such period (as determined under the qualified tuition program) incurred by the designated beneficiary for room and board while attending such institution. For purposes of subsection (b)(6), a designated beneficiary shall be treated as meeting the requirements of this clause.
(ii) Limitation The amount treated as qualified higher education expenses by reason of clause (i) shall not exceed
(I) the allowance (applicable to the student) for room and board included in the cost of attendance (as defined in section 472 of the Higher Education Act of 1965 (20 U.S.C. 1087ll), as in effect on the date of the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001) as determined by the eligible educational institution for such period, or
(II) if greater, the actual invoice amount the student residing in housing owned or operated by the eligible educational institution is charged by such institution for room and board costs for such period.
[/quote]
</p>
<p>xiggi:</p>
<p>not surprising that different definitions exists; indeed, I was digging thru two sections of code recently, and they had a significantly different definition of Small Business – one defined Small Business as companies with assests <$1MM, and a chapter later, the def changed to <$50MM. Only our ingenious Congresspersons could come up with something so… :D</p>
<p>i’m not quite sure about what all can be written off or not, but i did my taxes the other day and i’m getting a nice sum of money back. i then proceeded to go buy myself a new computer. :)</p>
<p>Xiggi, (and everyone)… I think your reference illustrates what separates us lawyers from the rest of the pack – you have found a definition of one phrase under one provision of law and mistakenly interpreted it to apply to a different provision using different terminology, or assumed that there is a contradiction in terms. This is an understandable error… but basically you can’t juxtapose statutes that way, and the law is pretty clear. </p>
<p>The section you found refers to 529 of the tax code, which is the part that governs tax-sheltered college savings plans – it defines the type of plan, and then goes on to describe what kind of distributions are allowed to be made without incurring tax penalties. So for purposes of that section, “Qualified Higher Education Expenses” means, those expenses for which payment can be made from the 529. </p>
<p>DrDrewmom wanted to know if she could deduct certain expenses she paid out of pocket – not from a 529. So her question is governed by § 222. “Qualified tuition and related expenses” – *In the case of an individual, there shall be allowed as a deduction an amount equal to the qualified tuition and related expenses paid by the taxpayer during the taxable year.<a href=“Note%20the%20specific%20use%20of%20the%20word%20%22tuition%22%20rather%20than%20%22higher%20education%20expenses%22.”>/i</a></p>
<p>The section goes on to specify *The term qualified tuition and related expenses has the meaning given such term by section 25A (f)<a href=“Section%2025A%20is%20the%20statute%20that%20provides%20for%20the%20Hope%20and%20Lifetime%20Learning%20Credits”>/i</a>
See: <a href=“http://www4.law.cornell.edu/uscode/search/display.html?terms=tuition%20deduction&url=/uscode/html/uscode26/usc_sec_26_00000222----000-.html[/url]”>http://www4.law.cornell.edu/uscode/search/display.html?terms=tuition%20deduction&url=/uscode/html/uscode26/usc_sec_26_00000222----000-.html</a></p>
<p>So what it all means is that if you have income below a certain threshhold, you can either deduct or get a credit for tuition. If you have money in 529 account, you can use it to pay more than just “tuition” – you get to spend it on all “Qualified Higher Education Expenses”. But you can’t get a tax deduction for anything you take out of the 529. (Trust me on this one – I won’t quote the statute, but it is very clear that double-dipping is not allowed).</p>
<p>So basically, DrDrewsmom can’t write off the application fee or SAT costs because it isn’t tuition – nor are books, or the meal plan. Since the maximum allowable deduction is $4000, next year when DrDrew is in college, there will be more than enough “tuition” to allow the maximum deduction. </p>
<p>On the other hand, a wise parent who has a tax-sheltered 529 plan worth $40,000 can probably spend it all in one year. That’s why its a better deal tax wise to be rich and have money to invest than to be middle class with a pay-as-you-go lifestyle.</p>
<p>Thanks Calmom and bluebayou for the explanation(s)! I will forgo trying to include those fees and submit today. Surprisingly big refund coming this year :D</p>
<p>Although now I’m kind of peeved that I didn’t include a book I had to buy for myself when I took a class a couple years ago. It was about $100 and I HAD to buy it at my school’s bookstore because it was an online course and every student had to have the cd that was shrink-wrapped in with the book. This was how you were identified as an online student enrolled in the class. Every other book I’ve had to get I’ve usually purchased from half.com or amazon.</p>