<p>Since D is going to go to a private university (MIT or similar), I’ve following questions:</p>
<li>Total cost of MIT for 2008 - 09 was $50,000 with the following breakup
Tuition - 36500
Room And Meal - 10500
Additional Expenditures - 3000</li>
</ol>
<p>What from the above is tax deductible and to what extent?</p>
<li>MIT says if you apply for FA and doesn’t receive any (i.e EFC > cost) then MIT still provide you $2000 towards work study program.</li>
</ol>
<p>None is tax deductible, as far as I know. I asked our accountant this year, he told me unless I could prove it’s related to childcare in order for me to work. In some ways college is a form of babysitting…:)</p>
<p>Work study is a guaranteed job on campus if your kid should choose to work.</p>
<p>I think college education should be tax deductible, maybe some parents would then choose to pay for college education instead of a second home or a new Lexus.</p>
<p>loan interest for you, spouse or children is an subtractive adjustment to income and is not deductible on schedule D. There is also HOPE credit and I believe another credit for low income.</p>
<p>Tuition is deductible or you can use a tax credit. When I helped my grad student DD do her taxes their was a place to input tuition paid and it reduced something, but maybe that phases out at certain income levels? or maybe it has to do more with financial aid???</p>
<p>If any grants are provided, they are taxable to the amount that exceeds tuition, so wouldn’t that mean the tuition amount is tax deductible in some circumstances?</p>
<p>The most common work-study jobs at MIT (other than research jobs, which are often funded by professors or the UROP office and not officially through work-study) are library desk worker jobs or dormitory desk worker jobs. I worked as a library desk worker my freshman year and enjoyed it – I had light duties and always had time to do some homework on my shift. Campus minimum wage was $9.00/hr when I was there, and it may have increased since I’ve graduated.</p>
<p>^^^
not necessarily, but usually
If you have a lot of assets, and little income, you will still pay full fare, yet you could take the tuition deduction because the limits are based on income, not assets.</p>
<p>Thanks for all the replies, it is sad that there is no tax deduction on the college tuition. I always thought that it is true only up to high school.</p>
<p>The Hope Credit and Lifetime learning credit take $1000 off your TAXES (ie, a better deal than off your gross income) – but read carefully because there are rules about which you can take when (you don’t want to take them in reverse order).
Good luck</p>
<p>Hope credit can actually reduce your taxes by $1650 (100% of the 1st $1100 of qualified education expenses and 50% for the next $1100). It is for 1st and 2nd year students only. Lifetime learning can reduce your taxes by $2000 but is only 20% of the 1st $10,000. The lifetime leaning can be taken in any year. Sometimes it may be more beneficial to take the lifetime even in years 1 & 2 (as soon as 20% of qualified expenses exceeds the maximum $1650 for the Hope). </p>
<p>The credits do start to phase out at modified adjusted gross incomes (MAGI) of $47,000 and $57,000 ($94,000 and $114,000 if you file a joint return).</p>
<p>Just remember you cannot double dip - that is you cannot use the same qualified education expense to make a scholarship/grant non taxable then use it again for the Hope or for 529 account withdrawals. You can choose which is the most beneficial tax benefit to take - it can make a difference.</p>
<p>Talk to your tax accountant. It may save the family money to have the students not be declared dependents on their parents’ tax forms, but instead declare themselves on their own form- we have been able to let son claim the tuition tax credit this way (he had taxable interest and needed to file anyway). We have a “squeaky clean” accountant so am sure this is legal.</p>
<p>Columbia Student’s post sums it up. Not much of a tax break for college bills.</p>
<p>Before you have your child declare themselves as independent for tax purposes (in other words…you do not declare them on YOUR taxes)…you should check with your health insurance and car insurance providers. Our college students MUST be dependent/in school to be included on our family health insurance plan. It would cost us MUCH more to buy them individual health insurance than that tax break would yield. Not worth it to us.</p>
<p>Besides…in order for the child to receive the Hope or Lifetime Learning credit they have to have enough taxable income to make it worthwhile. In the case of the Hope Credit, that would be about $16,500 in taxable income. Meaning over $24,000 in gross income. Because they would be at the 10% income tax bracket and the Hope Credit is $1,650. If they were making that much money, they are probably filing independently anyway.</p>
<p>^It sometimes makes a difference for the last year of undergrad – half the tax year the student is in school, and the other half the student has graduated and is making money. I used the Hope credit in the tax year when I graduated from college, because I would have had to pay quite a bit in taxes on my grad school stipend if I hadn’t, but I was really only independent for the second half of the year.</p>
<p>And POIH, MIT actually has its own student health insurance, which is not bad. Students are required to get MIT’s insurance unless they can prove that parental insurance will work in Massachusetts.</p>