Fiscal Tax Blog

New tax law extends through December 31, 2009 the above-the-line higher education tuition deduction. The deduction allows eligible taxpayers to deduct the costs of qualified higher education expenses paid during the year for themselves, a spouse, or a dependent. This tax deduction could significantly reduce your taxable income resulting in an even larger tax refund.

Tax Tip: To take advantage of this tax break your tax status can not be married filing separately. The deduction continues to be barred to taxpayers whose filing status is married filing separately, or if another person can claim an exemption for the taxpayer as a dependent on his or her tax return.

Tax Tip: For many tax payers, tuition expenses may also qualify for the HOPE or Lifetime Learning tax credits. In some situtations, taxpayers might see greater tax savings by claiming one of these credits instead of this deduction. Confused about the difference between a tax credit and a tax deduction? Read the quick learning module in our “Tax Preparation Made Easy” series on the difference between tax credits and tax deductions.

Can't take advantage of this tax break?

Check out our list of 40 Tax Breaks that you could use to get your largest tax refund ever in 2009.

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