Can a Full Time College Student Claim Commuting Expenses on a Tax Return?
If you're like a lot of people, you want to save money anywhere you can. If you're a college student, tax deductions can help, particularly if they include commuting to school. Though you cannot deduct the transportation expenses as you would if it were a business expense, one of the educational deductions allowed by the Internal Revenue Service does allow transportation costs to be included.
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Tax Credits and Deductions
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The IRS offers four tax credits and deductions you can take if you are going to college -- the American Opportunity Credit; the Lifetime Learning Credit; the Tuition and Fees Deduction; and the Student Loan Interest Deduction. Of the four, only the Student Loan Interest Deduction considers transportation to school a qualified expense. The other three specifically exclude transportation costs as a qualifying expense for the credit or deduction.
Student Loan Interest Deduction
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The Student Loan Interest Deduction is used to recoup the interest charged on your student loan. It is taken as an adjustment to your income, so you can claim the deduction even if you don't itemize. The deduction can only be taken if your loan was used for qualified educational expenses and if your income is below a specified amount. To be considered an eligible student, you must have been enrolled at least half-time when you incurred the expenses in a program leading to a degree, certificate or other recognized academic credential.
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Eligiblilty
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The IRS restricts the basic eligibility for the deduction to those who are filing any status except married filing separately; who are not claimed by anyone else as an exemption on his return; who are legally required to pay the interest on the student loan; and those who paid interest on a qualified student loan. A qualified student loan is one that was taken out only to pay for qualified educational expenses for you, your spouse or someone who was your dependent when you took out the loan, and it was taken out for the education of n eligible student. Loans from a relative or a qualified employer plan cannot be deducted.
Other Information
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You can reduce your income by up to $2,500, thereby reducing your tax liability. Your modified adjusted gross income cannot exceed $75,000 -- $150,000 if filing jointly -- and you can continue to deduct the interest paid on the remainder of your loan after you leave college. Voluntary interest payments can count but only if they are paid on a qualified loan that requires you to pay interest. Qualified education expenses include tuition, fees, books, supplies, equipment, room and board and other necessary expenses, such as transportation.
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