Sending your children to a private school can greatly enhance their learning experience and open up opportunities for their future. The cost of private schooling for your children from kindergarten through 12th grade is not tax deductible. However, for tax purposes, sending your children to a private postsecondary educational institute can be tax deductible in the form of both tax credits and deductions.
To qualify for education-related tax credits and deductions, your child must be attending an eligible educational institute. Generally, all public and private colleges, universities, vocational and similar postsecondary schools are eligible, but if you're not sure, ask the school directly.
Several tax credits are available to help offset the costs of tuition and course materials for your child. The Hope Credit was expanded into the American Opportunity Credit in 2009. It is designed to help you offset up to £1,625 in costs for the full four years of college. The Lifetime Learning Credit helps offset up to £1,300 per year of college expenses. Multiple educational tax credits cannot be taken at the same time, and income restrictions normally apply.
If you are unable to claim one of the tax credits for education expenses, you may qualify for specific tax deductions instead. The tuition and fees deduction allows you to deduct up to £2,600 of qualified education expenses. Alternatively, you may qualify to deduct the interest payments made on your child's student loans.
Tax credits and deductions each come with specific requirements and limitations. You cannot claim more than one credit in the same year, for example, and you must meet specific income guidelines to qualify for some. The American Opportunity Credit is available to single or head of household filers who earn less than £52,000 in adjusted gross income but not more than £58,500, or less than £104,000 and not more than £117,000 for married filing jointly. If your income exceeds these limits, you might elect to choose the tuition and fees deduction options instead.