Legislation passed at year-end 2006 restored the tax deduction for college tuition and fees, which had expired. Therefore, you can claim it on your 2006 tax return, if you paid bills for higher education last year.
* You can get a deduction of up to $4,000 on your 2006 tax return if your income for 2006 was no more than $130,000 on a joint return ($65,000 for single filers).
* You can take a $2,000 deduction if your income for 2006 was over $130,000 but no more than $160,000 on a joint return (between $65,000 and $80,000 for single filers).
If you’re over the $80,000 or $160,000 limits, no deduction is available.
If you do qualify, this is an “above-the-line” deduction, which can be taken even if you don’t itemize deductions. Above-the-line deductions reduce your adjusted gross income (AGI) and may save taxes elsewhere on your return. In addition, a lower AGI may provide more college financial aid for your student.
This deduction can be taken on Form 1040, line 35. Enter "T" on the dotted line to the left of that line entry to claim the tuition and fees deduction.
