Some tuition costs may be eligible for a medical tax deduction.

students sitting and studying

Some tuition costs may be eligible for a medical tax deduction.

Although these tax advantages are phased out for higher-income taxpayers, you might be able to claim one of the two higher education credits if you have children enrolled in college.

You probably already know how expensive college is these days if you have kids who are currently enrolled in it. Although these tax advantages are phased out for higher-income taxpayers, you might at least be able to claim one of the two higher education credits for qualified expenses.

Tax relief: If you itemize deductions on your personal tax return, a portion of the tuition payment you make for a child may be deductible as a medical expense. This may push you over the deduction threshold or increase an existing write-off.

Let’s begin with some context. If you itemize deductions, you are now only permitted to deduct unreimbursed medical expenses up to 7.5% of your adjusted gross income (AGI), as opposed to 10% of AGI. Since several years ago, the medical expense deduction threshold has oscillated between 10% and 7.5% of AGI; however, recent legislation has made the lower threshold a permanent part of the tax code, effective in 2021.

Nonetheless, this deduction threshold remains onerous for the majority of taxpayers. Your deduction is only $1,000, for instance, if your AGI is $100,000 per year and you have $8,500 in qualifying medical expenses. You cannot deduct anything if your qualified medical expenses total $7,000 or more.

As a result, you should search through your records for any deductible medical expenses that might improve your chances of receiving a deduction. The list of allowable expenses may be longer than you think. For instance, you might be able to deduct some of the tuition you pay for your child’s higher education.

In particular, the IRS states in Pub. 502 (Medical and Dental Expenses) that if the costs of a health insurance plan are separately stated or are readily available from the school, you can include them in your deductible amount.

A useful tip is to ask your child’s college or university for a written breakdown of expenses. This might offer the necessary evidence to back up a claim that some of the tuition is deductible as a medical expense.

Be aware that a child’s special education expenses might be deducted under the category of medical expenses. Notably, the IRS recently decided that if the child’s primary reason for attending the special school is for medical reasons, tuition paid for the institution could be considered a deductible medical expense. Special schools are institutions created to help students manage or overcome disabilities. In order to be eligible, the doctor of the child must endorse the use of special education.

In conclusion, don’t dismiss a medical expense deduction so quickly. Some costs you’ve forgotten, like the portion of tuition related to health insurance, could have an impact.

The tax laws are very complex. Our short blog articles cannot cover in full all the nuances of the rules. Your specific facts may hold various opportunities and possible risks that only trained, experienced, and highly qualified tax specialists can spot. We encourage you to find such help, rather than trying to figure it all out on your own. Consider giving this marketplace a try by posting your project and signing up here.

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[…] Although these tax advantages are phased out for higher-income taxpayers, you might be able to claim one of the two higher education credits if you have children enrolled in college. You probably already know how expensive college is thes  […]

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