||2003 Tax Year
This is archived information that pertains only to the 2003 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.
Important Changes for 2002
Standard mileage rate. Generally, if you drive your car to and from school, you can deduct 36½ cents per mile. See Transportation Expenses under
What Educational Expenses Are Deductible.
Limit on itemized deductions. If your adjusted gross income for 2002 is more than $137,300 ($68,650 if you are married filing separately), your itemized
deductions may be
limited. See the instructions for line 28 of Schedule A (Form 1040).
Employer-provided educational assistance program extended. The tax-free status of up to $5,250 of employer-provided educational assistance benefits each year has been extended through
2010. Beginning in
2002, it applies to both undergraduate- and graduate-level courses.
Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of
selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children
home by looking at the
photographs and calling 1–800–THE–LOST (1–800–843–5678) if you recognize a child.
This publication discusses work-related educational expenses that you may be able to deduct as business expenses. It also
discusses the exclusion
from income of employer-provided educational assistance benefits.
To be able to deduct work-related educational expenses as business expenses, you must:
Itemize your deductions on Schedule A (Form 1040) if you are an employee,
File Schedule C (Form 1040) or Schedule F (Form 1040) if you are self-employed, and
Have expenses for education that meet the requirements discussed under Qualifying Work-Related Education.
Your work-related educational expenses may also qualify you for other tax benefits, such as the tuition and fees deduction
and the Hope and
lifetime learning credits. You may qualify for these other benefits even if you do not meet the requirements listed above.
Also, keep in mind that your work-related educational expenses may qualify you to claim more than one tax benefit. Generally,
you may claim any
number of benefits as long as you use different expenses to figure each one.
Tuition and fees deduction.
Because this deduction is an adjustment to income, you can claim it even if you do not itemize deductions on Schedule
A (Form 1040). You can deduct
the tuition and fees you pay that are required for higher education courses, possibly decreasing your 2002 taxable income
by up to $3,000. However,
you cannot qualify for this deduction if your income is more than $65,000 ($130,000 for joint returns). See chapter 4 of Publication
Benefits for Education, for more information.
Hope and lifetime learning credits.
These education credits may be available for tuition and related expenses you pay for higher education. Generally,
credits are more beneficial than
deductions because they reduce your tax rather than your taxable income. The Hope credit could reduce your tax by up to $1,500
in 2002, and the
lifetime learning credit by $1,000. You will not qualify for either of these credits if your income is more than $51,000 ($102,000
for joint returns).
For more information, see chapters 1 and 2 of Publication 970.
Other tax benefits for education.
In addition to the tax benefits that are available for your work-related educational expenses, there are benefits
for educational expenses that are
not work related, such as your child's college tuition and fees and the interest on your qualified student loan. For information
about these and other
tax benefits for education, see Publication 970.
When you figure your taxes, you may want to compare these tax benefits so you can choose the method(s) that give you the lowest
First, figure your taxes using the expenses as business deductions. Then, figure your taxes again using only the expenses
that qualify for a Hope or
lifetime learning credit. Or you may find that a combination of credit(s) and deduction(s) gives you the lowest tax.
Comments and suggestions.
We welcome your comments about this publication and your suggestions for future editions.
You can e-mail us while visiting our web site at www.irs.gov.
You can write to us at the following address:
Internal Revenue Service
Tax Forms and Publications
1111 Constitution Ave. NW
Washington, DC 20224
We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number,
including the area code, in
Useful Items - You may want to see:
Travel, Entertainment, Gift,
and Car Expenses
Scholarships and Fellowships
Tax Benefits for Education
Form (and Instructions)
Employee Business Expenses
Unreimbursed Employee Business Expenses
Schedule A (Form 1040)
See How To Get Tax Help, near the end of this publication, for information about getting these publications and forms.
Publications Index | 2003 Tax Help Archives | Tax Help Archives | Home