(Oct. 8, 2008) On October 3, Congress gave final legislative approval to and the President signed into law the so-called “bailout bill” for financial institutions. While the impact on banks and the overall economy, including the credit crunch, received a great deal of attention, less notice was paid to a provision of key importance to the medical education community.
The bill provided an extension of the above-the-line deduction for qualified tuition and related expenses. The previous provision expired at the end of 2007. The law enhances access to higher education by helping reduce the cost of attendance.
This critical tax benefit allows students or parents who do not qualify for the HOPE or Lifetime Learning tax credits to deduct qualified higher education expenses from their taxable income. Specifically, it provides for a $4,000 deduction for filers earning up to $65,000 annually and joint filers earning up to $130,000 annually.
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