Tuition and Fees

• IRS guidelines state that a tax deduction of up to $4,000 is available for education expenses paid during the year for you, a spouse or a dependent. Taxpayers can claim the deduction for tuition and fees even if they do not choose to itemize deductions on their income tax return. You cannot take the deduction for tuition and fees if you choose the filing status of married filing separately, or if another person can claim you as a dependent on his tax return, or if your modified adjusted gross income is $80,000 or more. The income limit is $160,000 for married couples filing joint returns.
  
  

Interest on Student Loans

• A college education can cost $100,000 or more, which can result in high levels of debt and interest payments amounting to hundreds of dollars a month. The 2011 IRS regulations state that single taxpayers with a modified adjusted gross income of $70,000 or less and joint filers with an income of $140,000 or less may deduct up to $2,500 in student loan interest paid The loan must be used to pay for tuition, fees, room and board, books or other necessary education-related costs. The deduction applies to loans taken out for you, a spouse or a dependent.
  
  

Work-Related Education

• Employers sometimes require workers to take classes while they are working to maintain or improve skills and knowledge related to a specific job field. IRS guidelines state that the cost of education required by an employer may be tax-deductible on the tax return of the employee as an unreimbursed employee expense. The deduction is equal to the amount by which expenses exceed 2 percent of your adjusted gross income.
  
  

Education Assistance

• Employers may pay for a portion of an employee's education as a job benefit. Fringe benefits given to employees are normally included in the worker's taxable income, but the IRS reports that up to $5,250 in employer-provided education assistance can be excluded from income each year, as of 2011.