Form 8917 which bears the title ‘Tuition and Fees Deduction’ is a form provided by the Internal revenue service to enable a taxpayer claim educational expenses such as fees and tuition. In addition, it acts as a worksheet on which the deduction can be computed. The form is submitted alongside Form 1040 or Form 1040A and can help a taxpayer redeem up to $ 4,000 taxable income from qualified education expenses paid for students.
Form 8917 Rules
For one to be eligible for education deduction thus to fill Form 8917, one must have had a spouse or any other dependant who had enrolled at the participating schools in the previous financial year. The student ought to have completed high school or met GED requirements before undertaking the tertiary course. Eligible colleges include any accredited universities that can participate in a federal student-aid programme.
However, individuals with adjusted gross incomes higher than eighty thousand dollars are ineligible to fill Form 8917. A married individual is also required to fill the form jointly with the spouse, and their combined income should not exceed a hundred and sixty thousand dollars. In addition, if one can be deemed as a non-resident alien any time during the financial year also can not benefit from this deduction and thus would be wasting time filling the form. Lastly, those up for lifetime learning, American opportunity or hope credit are not allowed to benefit a second time from this deduction.
The expenses that quality for deduction and should thus be included in Form 8917. Fees in this case strictly includes academic related expenses, but neither school supplies nor books. In the case that any grants or tuition aid was provided by an employer, the tax payer must subtract their amount from the deduction requested. Other expenses that do not warrant deductions are food, medical expenses, insurance and transport.
In case, after filing your tax returns, you or the student receives any tax-free education assistance for education expenses specifically tuition and fees for which you claimed deductions, you will have to repay that part of the deduction. You must include the assistance or refund in your income to the extent to which it reduced your taxes for that tax year. The deductions must be refigured for the past year to reflect that the assistance or refund was received that year. This new amount to include in your income is known as recapture.
This can be well depicted by an example. Suppose a taxpayer paid $ 3,000 as tuition fees in December 2009 and the student started college in January 2010. the taxpayer then filled their 2009 Form 8917 in February 2010, claiming a fee deduction of $ 3,000. Proceeding this, the student dropped two courses and was refunded $ 1,500. The taxpayer must refigure their the 2009 Form 8917 and claim a deduction of $ 1,500 and not the initial $ 3,000. On the income line of the 2009 Form 1040 or Form 1040 A, the difference of $ 1,500 must be included as income.
