Yes, you may claim tax deductions for paying for your child's college education subject to certain conditions and limitations. The relevant law that governs tax deductions in the United States is Internal Revenue Code (IRC) Section 117.
Under Section 117, qualified tuition and related expenses may be deducted as an adjustment to income. Qualified expenses include tuition fees, books, supplies, and equipment required for enrollment or attendance at an eligible educational institution.
However, there are certain limitations to the tax deduction. The maximum allowable deduction amount is $4,000 per year per student or $2,000 for taxpayers filing as married filing separately. The deduction amount is also phased out for taxpayers with a modified adjusted gross income (MAGI) above $65,000 or $130,000 for joint filers. This means that the deduction decreases as the taxpayer's income increases, and it fully phases out at a MAGI of $80,000 for single filers or $160,000 for joint filers.
Additionally, only taxpayers who pay qualified tuition and related expenses directly to the educational institution can claim this deduction. If the payments are made through a scholarship, grant or a third party, such as a grandparents or parents' employer, the taxpayer may not claim the deduction.
Taxpayers who cannot claim the deduction may still be eligible for other education-related tax benefits, such as the American Opportunity Tax Credit or the Lifetime Learning Credit, subject to different qualifications and limitations.
In summary, taxpayers may claim tax deductions for paying for their child's college education under certain conditions and limitations. It is recommended to consult with a licensed tax professional for specific advice based on individual circumstances.
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