A taxpayer can claim a deduction for qualified tuition and related expenses paid during the year.
Specific Details
The parents reduced their taxable income by $4,000 by claiming a deduction for qualified tuition and related expenses paid during the year. Since the parents income was taxed at the 30% tax bracket, the income reduction may decrease their income taxes by $1,200 ($4,000 x 30%).
Potential Savings
If you are in a combined (federal, self-employment, and state) tax bracket of 30%, you could reduce your taxes up to $300 for every $1,000 of income reduction by claiming a deduction for qualified tuition and related expenses paid during the year.