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Frequently Asked Tax Questions

Itemized Deductions, Standard Deduction - Education & Work-Related Expenses

  1. May I claim both my job-related education expenses (minus 2% of AGI) and an education credit on my tax return?
  2. My employer reimbursed me for my graduate school tuition and included it on my W-2 as wages. The program improves skills needed in my current field of employment but doesn't qualify me for a new trade or business. Where can I claim this educational expense on my Form 1040?
  3. Last year, my parents and I both took out student loans for me. We both received Form 1098-E for our separate loans. I wasn't their dependent last year. Can we both claim student loan interest on our tax returns?

Rev. date: 08/03/2017

May I claim both my job-related education expenses (minus 2% of AGI) and an education credit on my tax return?

Yes, if you qualify for both tax benefits and don't use the same educational expenses to claim both benefits (no double benefit).

Rev. date: 08/03/2017

My employer reimbursed me for my graduate school tuition and included it on my W-2 as wages. The program improves skills needed in my current field of employment but doesn't qualify me for a new trade or business. Where can I claim this educational expense on my Form 1040?

Because your employer included your tuition reimbursement in your wages, you're treated as paying the tuition yourself out-of-pocket. To determine where to claim the educational expense, review all of the education credits and deductions available for the tax year. 
Also review your eligibility for taking the expense as a miscellaneous itemized deduction on Schedule A (Form 1040), Itemized Deductions. When claiming the itemized deduction:

Rev. date: 08/03/2017

Last year, my parents and I both took out student loans for me. We both received Form 1098-E for our separate loans. I wasn't their dependent last year. Can we both claim student loan interest on our tax returns?

You may be able to claim a student loan interest deduction for the payments you made on the student loan you took out on your behalf, provided you meet the other requirements.
In order for a taxpayer to claim a deduction for student loan interest, the loan must be incurred for a taxpayer, their spouse, or a person who was their dependent at the time they took out the loan. Your parents don't qualify to claim the student loan interest deduction for the interest they paid on the loan because you weren't your parents' dependent at the time the loan was taken.
However, there are exceptions where you may still be considered their dependent at the time the loan was taken out. If you were considered your parents' dependent when they took out the student loan, the interest they paid on the loan may qualify them for the student loan interest deduction. See Exceptions under Qualified Student Loan in Publication 970, Tax Benefits for Education.