Anyhow, as I was crunching the numbers, I came across the realization that the 2006 1040 form does not have a line for Tuition and Fees, like the 2005 form did! As a student who makes very little money and has to pay a good chunk of it back into the university for non-remittable fees (roughly 8% of my stipend), I was a bit put out. This was great in the last many years, because I didn't have to itemize my deductions to get the break.
After some digging, I came across IRS publication 970 that describes this deduction MANY times before finally explaining how to take the deduction. For all the other U.S. grad students out there, here's how you do it:
- Put a T next to the box for line 35. The instructions say to put it on the dotted line, but my copy of form 1040 doesn't have said line.
- Enter the deduction in the box for line 35.
This is pretty janky. Is it just me, or does this seem like kind of a last-minute "oh crap, we shafted the students, better do something" situation? This thought is further backed up by this tax law change brief that I later found. It mentions how the Tuition and Fees deduction expired, but has been "extended" until 2007.
It's also important to note that there's a cap on how much you can deduct of up to $4000 depending on your gross income. This may or may not be new this year (I don't know).