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04-15-2016 12:28 AM
I have been told that the computer I purchased for my son to start college is deductible as a College Expense.
Is that true? And if yes, how and where do list it as a deduction/expense?
04-15-2016 12:58 AM
Welcome to the community.
The way education expenses work is that there are four types of tax benefits that you can choose from, but you can only take one of them. There are the Schedule A education deduction, the tuition & fees deduction as an adjustment to income, the Lifetime Learning Credit, and the American Opportunity Credit. Since your son is just starting college, you'll want to choose the American Opportunity Credit as it is the most advantageous.
The American Opportunity Credit consists of up to $1,500 in nonrefundable credit and up to $1,000 in refundable credit. To put it in the most basic terms, you have to figure out how much qualified expense you can use toward the credit by adding up all of your son's qualified expenses for the year and then subtracting that total from the total of all of your son't scholarships & grants. The difference between scholarships and expenses is then plugged into Form 8863 (Education Credit) to figure the credit itself. Normally the college will send your son a Form 1098-T that shows his tuition & fees as well as his scholarships.
Yes, your son's computer is a qualified expense for the AOC if it was REQUIRED for classes. The costs of required texbooks, laptop computers, lab coats, etc. may be added to tuition and fees to come up with your total qulified expenses. As a note here, room & board and meals are not qualified expenses.
Hope this helps & please ask if you have any other questions.