How to deduct school tuition from taxes?

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Topic Author
Econberkeley
Posts: 191
Joined: Thu Jan 16, 2014 5:51 pm

How to deduct school tuition from taxes?

Post by Econberkeley »

My son is attending a special needs school. We are paying over $36K/yr and alot of therapies which can be claimed under medical expenses.

Medical expense deduction is easy and I know how to enter them in freetaxusa which I use for my tax return

But tuition deduction is complicated. Here is the IRS publication 502

https://www.irs.gov/pub/irs-pdf/p502.pdf

Here is the excerpt from this publication

https://imgur.com/a/IIFkKck

My understanding from the above excerpt is school tuition report should indicate the medical % and education % spent on the child. Also, we can not assume the whole tuition is used on medical purpose only and deduct the whole amount.

Just to give you a perspective on what some other schools do, here is what I found.

https://ttlc.intuit.com/community/colle ... /00/128684

Here is an excerpt

https://imgur.com/a/U3bhtRU

My understanding is IRS specifically says I can not take all tuition and deduct it. It has to be indicated by the school that certain percentage of tuition is spent for medical purposes only. Yet I asked this question in the school board and financial advisors working in big firms who are specialized in this matter and they all said all their clients are taking full deduction.

Any comments/ thoughts on this?
fabdog
Posts: 2543
Joined: Wed Jan 16, 2013 12:59 pm
Location: Williamsburg VA

Re: How to deduct school tuition from taxes?

Post by fabdog »

Just because others are taking a full deduction does not mean that is the right thing to do, or covers your specific situation.

I think you laid out quite clearly what you need in your post. A statement from the school stating what portion of the tuition/fees are medical. Have you asked for that specifically?

Mike
GenawithanE
Posts: 181
Joined: Mon Aug 26, 2019 11:14 pm

Re: How to deduct school tuition from taxes?

Post by GenawithanE »

There are situations where the full cost of the special needs residential school is a medical expense. I have personal experience of this, and at the time, over ten years ago, there were multiple IRS rulings/information that explained when this was legitimate. Unfortunately I cleaned them out given the passage of time, but I would urge you to talk to fellow parents and to a tax person who has experience in residential treatment situations.

It may also be the case that your school district should be paying the cost if they are unable to provide a free appropriate public education (this is a phrase that has meaning in this area). Again, check with fellow parents or professionals who can help with this question. This is a harder mountain to climb, but if it applies, it removes the financial burden instead of just making it deductible.

Good luck to you!
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Eagle33
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Re: How to deduct school tuition from taxes?

Post by Eagle33 »

Does the special needs school received any voucher(?) amount from either the local school district or state because your child is attending this school instead of the local public school? If so, then that local/state payment is for the education portion. Then I can see why other parents take 100% deduction of what they personally pay.
Katietsu
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Joined: Sun Sep 22, 2013 1:48 am

Re: How to deduct school tuition from taxes?

Post by Katietsu »

I have no personal knowledge. However, a quick google search indicates the deductibility of your school expenses changed in 2011. Here is a source to get you started.

https://www.journalofaccountancy.com/is ... 37378.html

In most cases, costs related to providing a child’s education are not considered medical care and, therefore, are not deductible as a medical expense. However, according to Regs. Sec. 1.213-1(e)(1)(v), the unreimbursed cost of attending a “special school” for a neurologically or physically handicapped individual is deductible as a medical expense if the principal reason for sending the individual to the school is to alleviate the handicap through the school’s resources.
lcheatha
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Joined: Tue Apr 05, 2016 9:14 am

Re: How to deduct school tuition from taxes?

Post by lcheatha »

I don't post often, but my daughter attended a school for kids with dyslexia for a few years. The handbook provided by her school said:

"In view of the diagnosis of a type of learning disability, all costs for diagnostic testing and tuition fees should be considered as income tax deductible under IRS ruling HB#69-607 and IRS Publication 502 (Medical and Dental Expenses). Parents should consult with their tax advisor. All contributions to the school are tax-deductible."

The school did a lot of research. We included most of the school expenses as medical expenses. These types of schools are very expensive. I hope you can find the documentation needed to deduct the large expense.
Topic Author
Econberkeley
Posts: 191
Joined: Thu Jan 16, 2014 5:51 pm

Re: How to deduct school tuition from taxes?

Post by Econberkeley »

The school got back to me with a tuition report that says 85% therapautic andn15% non therapautic

I talked to the finance director of the school and he told me i can only deduct 85% of the tuition as medical expense.
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