The IRS Deductions Blog

Archive for October, 2008

Question: Tax Deductions for Tuition and Student Loans Interest?

In the US, are BOTH the tuition and interest on the loans tax deductible?

I got a student loan for the first time this year. I’ve always just paid the tuition, and wrote it off taxes for the year that the tuition was paid.

This year I took a loan for the full amount of tuition. Will I be able to deduct both the expense and the interest off the taxes? Or do I have to pick one or the other?
I don’t have any other Itemized Deductions this year besides education.

Any relevant IRS link for research/reference is appreciated.

Answer: You may be able to deduct qualified tuition and related expenses that you pay for yourself, your spouse, or a dependent, as a tuition and fees deduction. To determine whether your expenses are qualified, refer to Publication 970 (http://www.irs.gov/publications/p970/index.html) , Tax Benefits for Education. You do not have to itemize to take this deduction. You can claim qualified tuition and fees as either: (1) an adjustment to income, as directed above; or (2) a Hope or Lifetime Learning credit, or (3) if applicable, as business expenses.

You cannot take the tuition and fees deduction on your income tax return if your filling status is married filing separately, or if you are claimed as a dependent on someone else’s return. The deduction is reduced or eliminated if your modified adjusted gross income exceeds certain limits, based on your filing status. You cannot claim the tuition and fees deduction and a Hope or Lifetime Learning credit for the same student. If the educational expenses are also allowable as a business expense, the tuition and fees deduction may be claimed in conjunction with a business expense deduction, but the same expenses cannot be deducted twice.

You cannot claim a deduction or credit based on expenses paid with tax-free scholarship, fellowship, grant, or education savings account funds such as a Coverdell education savings account, tax-free savings bond interest or employer-provided education assistance. The same rule applies to expenses you pay with a tax-exempt distribution from a qualified tuition plan, except that you can deduct qualified expenses you pay only with that part of the distribution that is a return of your contribution to the plan.

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Dyslexia program tuition was a deductible medical expense.: An article from: The Tax Adviser $5.95 This digital document is an article from The Tax Adviser, published by Thomson Gale on October 1, 2005. The length of the article is 663 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.Citation DetailsTitle: Dyslexia pro…

Almanac

MEETINGS

Assembly Democrats Commentary on Assembly Passage of the FY 2010 Budget (A-4100)

Question: If I have a 5000 Deductible For Health Insurance, what is the point of getting it?

I need to get insurance for a year while i take some time off of school so i need insurance. If there is a deductible, does that include office visits and prescriptions? Do I have to spend thousands or does that not apply for meds and dr visits?

Answer: I am not a insurance professional at all, I just have a policy like you with a high deductible. It does not include office visits or prescriptions. It is mainly for catastrophic illness or major accidents. If you had a serious car accident and the hospital bill was 80,000 (which would add up in like one week with surgeries), you only need to come up with 5,000. Not all things are covered with insurance too. I had an accident last July and had to pay over the deductible cause insurance just doesn’t cover some things the doctors charge for. And, the higher your deductible the lower your monthly payment. Good Luck.

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Business briefs

The North American International Auto Show will host its annual black-tie Charity Preview from 6-9 p.m. Jan. 15 at Cobo Center in downtown Detroit. The event benefits 12 children’s charities in the Metro area and has raised more than $79 million since its inception in 1979.

WITF Insurance Insight: Deductible 101

Question: How does the tax stimulus work for self-employed, no employees?

I am trying to get my taxes together for 2007. In 2007 I worked at home and earned either $7600 or $9100 (the larger is the money before the credit card deduction). I also worked part time at a gym earning $825. First, I’m trying to figure out what tax form to use (this is my first year self-employed) and I want to know if I will be eligible for the tax stimulus. I’ve read that self-employed are, but then I read that the stimulus is based on earned income (line 7 1040), which would discount my self-employed income from line 12, 1040. So, can anyone tell me if I would be eligible or not? Also, I read that being eligible depended on whether you paid taxes. Being self-employed, I didn’t pay taxes through the year (taxes were also not deducted for my PT job). I expected to pay them now (although, with EIC and my income, I am not supposed to pay taxes). Does that make me ineligible? Thank you so much for your help. This is my first time being so confused .

Answer: Earned income is both line 7 and line 12.

The stimulus plan is *not* done yet, so just don’t worry about it.

Items on Amazon Right Now for Gym Tax Deduction:

Community Calendar

Deadline for items for the Community Calendar is Wednesday noon two weeks before desired publication date.

Question: Do I pay an auto insurance deductible if I cause the accident, or does the owner of the other car pay?

I scratched someone’s car and the cost is going to be less than my deductible
So I don’t pay a deductible for property damage, but I do for damage to the car? Who pays the deductible? That’s my question!!!

Answer: Your deductible is for damage to your car, not his. If the damage is less than HIS deductible, you pay for the damage. You can let your insurance company pay, but it is normally more cost-effective in the long run to just pay it. It saves having an accident on your insurance record. If the damage is greater than HIS deductible, and he files a claim, His insurance company will sue you and your insurance company for the full amount. Your company ends up paying, you have an at-fault accident on your record, lose eligibility for no-claims discount for up to 5 years, and possibly have a surcharge on your premium.

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Royal Kunia Family’s New Year Starts With Illegal Fireworks Scare

The Chee family started 2010 off with a bang, literally.

Auto Insurance : How to Increase a Deductible to Lower Premiums on Car Insurance

There are many decorating options available when one is remodeling or redecorating a room in their home. When a person is looking for the best way to create a functional and beautiful small space however, there is often a challenge. A nest of tables can often solve the problem of surface space in a small room.

One of the needs that many people have in a small space is surface. When one is entertaining guests must have an area where they can put a cup or paper. Often one wants extra surface space for books or papers. In a small living space the extra surface area can be very difficult to obtain without cluttering the area.

The nest of tables provide one with three tables. The tables are exact replicas of each other. Each table may be intricately carved or designed. In addition, each table fits under the next. Two smaller tables are ‘nested’ under a larger table.

The functional use of these tables allows one to effectively have three work surfaces in the space provided for one. In a small space this allows one the necessary surfaces for guests. When guests leave the tables are easily re-nested and the room becomes uncluttered. The tables can be large or small. Some of the nest of tables are small coffee table sizes while others are very large.

Depending on the area where the tables will be used one may want to select a larger nest of tables to act as seating for diners. These tables are made with rollers on the feet so that they can be moved easily across a room. In a small space one may wish to have nesting tables that are tall with a smaller surface. These styles are available in both traditional designs and modern designs.

By placing a nest of tables beside each seating area one can easily create a salon feel in a large room. The tables give each person in a room the convenience of a table whether they are sitting at a dining table or in a chair. This allows guests to move freely in the room and place cups and glasses on tables that are placed strategically throughout.

Many of the tables are made of maple, oak, beech, or other hardwood. There are some tables that are use other natural materials which can be used effectively in an urban chic decor or minimalist decor. These tables provide the user with a black or dark colored surface sitting atop chrome legs. The sleek design provides the flow and continuity that one would want in that type of decor.

An individual wishing to add elegance to a traditional room will find that there are many types of nesting tables that provide the elegance found in Victorian times. These tables are intricately carved and reflect the elegance of the room that they grace. An individual will find these tables are usually glass covered and the legs bow out gently in a classic claw foot.

There are many nest of tables that are crafted on an individual basis which provide owners with a unique and functional piece of art. These tables often have the characteristic designs of the artist embedded in their surface and reflect the beauty of the wood that they have been made of. Some of the designs include blown glass and other materials that make the nest of tables extremely unique and rare.

Depending on what the function and use of a nest of tables will be, a person will want to discuss their vision with an individual who is knowledgeable about these tables. There are many styles and designs available. A professional can advise on the specific type of nest of tables that will meet an individuals needs and reflect their personal style.

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EnCana generates 2009 cash flow of US$5.0 billion, or $6.68 per share, on a pro forma basis

CALGARY, Alberta—-EnCana Corporation achieved strong 2009 financial and operating performance during a major economic downturn and a year when benchmark natural gas prices averaged about US$4.00 per thousand cubic feet , the lowest level in seven years.