Educational Tax Benefits

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.

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.

No. Any unused American Opportunity credit cannot be carried forward to future years. The American Opportunity Tax Credit remains in effect through 2016.
A credit is available up to $2,500 per student for the first 4 years of higher education for tuition, course related books, activity fees and any equipment that must be purchased from the educational institution as a condition of enrollment. Room & Board expenses do not qualify.
The credit begins to phase out for single taxpayers who have adjusted gross income between $80,000 and $90,000 and for joint tax filers when adjusted gross income is between $160,000 and $180,000. The credit is unavailable to taxpayers whose adjusted gross income exceeds the $90,000 and $180,000 thresholds..

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.

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.

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.

An Educational IRA is a custodial account or a trust set up for the purpose of paying the qualified higher educational expenses of the designated beneficiary of the account.
The designated beneficiary must be a child under age 18. In general higher educational expenses include tuition, fees, books, supplies and room and board for at least half-time attendance.
You may contribute up to $2,000 each year.
The contributions are not tax deductible.
For the current year, an individual may contribute to a child’s educational IRA if those individuals Modified Adjusted Gross Income is not more than $ 110,000 ($220,000 for a married filing joint return).
There is a phase out if the MAGI is between $95,000 and $110,000 for non-joint filers and between $190,000 and $220,000 for joint filers. Amounts in the account accumulate tax-free until distribution.
Distribution of the contribution is always tax-free and the earnings on the contribution are tax free if less than or equal to the years educational expenses.
If more than the educational expense then a pro rata calculation is required. The assets in the account must be withdrawn by the age of 30. No contribution amount may be made in any year who also contributes to a qualified state tuition program on behalf of the same beneficiary.

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.
In the current year the phase-out amount was if the Modified Adjusted Gross Income was more than $75,000 if single, head of household or qualifying widower and $150,000 if married filing jointly.
Qualifying loans include any debt incurred to pay for higher education expenses for you, 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.

For the same student, you cannot claim the Lifetime Learning Credit and the American Opportunity credit in the same year. You may claim each of the credits for a different student in your family.