Education

If you are a U. S. citizen or resident for tax purposes, who received fellowship amounts for studying, teaching or researching in the U. S., then see IRS Publication 970, Tax Benefits for Education, which is available at http://www.irs.gov/publications/p970/index.html
If you are a U. S. citizen or resident alien for tax purposes, who received fellowship amounts for studying, teaching or researching outside the U. S., then see Publication 54, Tax Guide for U. S. Citizens and Resident Aliens Abroad, which is available at http://www.irs.gov/pub/irs-pdf/p54.pdf.
If you are a nonresident alien for U. S. tax purposes, who received fellowship amounts for studying, teaching or researching in the U. S., then see Publication 519, U. S. Tax Guide for Aliens, which is available at http://www.irs.gov/pub/irs-pdf/p519.pdf.

Fellowship amounts are nontaxable where:
The recipient is an individual, who is a candidate for a degree at an educational organization (i.e., undergraduates or graduate students, but not post graduate); and
The fellowship amount is used for "qualified tuition and related expenses."
Qualified tuition and related expenses include tuition and fees required for the enrollment or attendance of a student at an educational institution, This would include fees, books, supplies and equipment required for courses of instruction at such an educational organization.
Fellowship amounts are taxable where:
Amounts are used for room, board, travel, clerical help, equipment, incidental living expenses and other expenses not required for enrollment in or attendance at the University.

If your son or daughter is going to college and you claim him or her as a dependent, then you can claim the education credits on your tax return. The 2 Credits are the American Opportunity tax credit or the Lifetime Learning Credit.
If your son or daughter is no longer a dependent, then he or she should claim any education credits on his or her own tax return. If you pay the college expenses for someone who is not your dependent, you cannot claim any the tax credit.
Qualifying expenses include amounts paid for tuition and any required fees (such as registration and student body fees). Qualifying expenses do not include any of the following: books, supplies, equipment, room and board, insurance, student health fees, transportation, or living expenses. You must be responsible for paying the college tuition and fees.
You also need reduce your qualifying expenses when figuring your tax credit by the amount of financial assistance received from grants, scholarships, or reimbursements from your employer. You do not need to reduce your qualifying expenses, however, if you paid for college tuition using borrowed funds, including student loans, or by using gifts from family members.
The amount of the Lifetime Learning Credit is limited over a phase-out range. If your adjusted gross income is below the phase-out, your credits are not reduced. If your income is in the middle of the phase-out range, your credits will be reduced. If your income exceeds the phase-out range, you are not eligible to claim the Lifetime Learning tax credit.
The modified adjusted gross income threshold at which the lifetime learning credit begins to phase out is $107,000 for joint filers, up from $104,000, and $53,000 for singles and heads of household, up from $52,000.
The American Opportunity tax credit is worth up to $2,500 on the first $4,000 of qualifying educational expenses, which include course materials as well as tuition. The American Opportunity credit applies to all four years of undergraduate college education. The credit is gradually reduced (or "phased out") for income from $80,000 to $90,000 (or $160,000 to $180,000 for joint filers). The tax credit is not available for people with incomes above the phase out range. Up to 40% of the credit is refundable, meaning that it can generate a refund larger than the amount of payments you made. NO DEDUCTION IS ALLOWED FOR THOSE FILING AS MARRIED FILING SEPARATELY

The deduction for student loan interest will continue to be available to every person who is legally obligated to repay a student loan through the year 2012.
Taxpayers who have student loans are allowed to deduct up to $2,500 in annual interest payments on the loan directly from their gross income, subject to phase-out rules.
Your lender will send you a Form 1098-E. The amount of interest you paid on your student loans for the year will be reported on Form 1098-E, box 1.
The $2,500 maximum deduction for interest paid on student loans begins to phase out for a married taxpayers filing a joint returns at $125,000 and phases out completely at $155,000, an increase of $5,000 from the phase out limits for tax year 2011.
For single taxpayers, the phase out ranges remain at the 2011 levels.($60,000-75,000).
Qualifying loans include any debt incurred to pay for higher education expenses for yourself, spouse or a dependent at the time the debt was incurred.
The student must have been enrolled on at least a half-time basis when the loan was made in order for the interest to be deductible. The student will receive a form verifying his or her half-time basis eligibility.

Yes. The American Opportunity and Lifetime Learning credits are two federal credits available for qualifying higher education expenses paid to eligible educational institutions.
Qualified educational expenses would include tuition, required fees and course related books, but would NOT include room and board, insurance, transportation or other personal living or family expenses, medical expenses, supplies or equipment.
The credits are subject to income limitations. The credits are not available for married filing separate returns. Both credits are claimed on IRS Form 8863.
Speak to your local CPA about the tax benefits of claiming these credits.

No. Any unused Lifetime Learning credit cannot be carried forward to future years. The phase out for married taxpayers is Adjusted Gross Income between $107,000-$127,000.
The phase out is between $53,000 and $63,000 for single, head of household or qualifying widower(s) filing status taxpayers. Married filing separately status are not allowed a Lifetime Learning credit.

Contributions to an Educational IRA must be completed by the due date of the return 4/15/XX , NOT including extensions.

Yes. As a doctor or nurse you may deduct the cost of refresher courses. The IRS feels these courses are required to maintain or improve your job skills.

Generally yes. As an attorney you can deduct the costs of a master's degree program (LLM), if you are a practicing attorney at the time of the master's course.