1. Adjustments to Income

2. Items Covered in this Section
Educator Expenses
Received income from self-employment
Paid a penalty for early withdrawal of savings
Paid alimony
Contributions to a traditional IRA
Paid student loan interest
Received income from jury duty that was turned over to an employer
Paid college tuition

3. Educator Expense
K-12 teacher, instructor, counselor, principal, or aide
Employed at least 900 hours during school year
Deduct $250 in qualified expenses
Expenses exceeding$250 can be deducted on Schedule A
Classroom materials (Books, supplies equipment)

4. Penalties Paid
Taxpayers can deduct, from their income, penalties paid for withdrawing funds in a deferred interest account before maturity
Certificate of Deposit
See form 1099-INT or 1099-OID (Original Issue Discount)

5. Alimony Payment to a spouse or former spouse under a divorce
Does not include child support
Person paying alimony can subtract it as an adjustment to income

6. Student Loan Interest Smaller of $2,500 or the interest paid
Gradually reduced based on filing status and MAGI
Must be solely to pay qualified education expenses
Cannot be from related person or made under a qualified employer plan

7. Student Loan Interest Reductions to Qualified Expenses
Employer-provided educational assistance
Tax-free withdrawals from Coverdell ESA
U.S. savings bond excluded from income for qualified higher education expenses.
Certain scholarships & fellowships
Veteran’s educational assistance benefits
Any other nontaxable payments

8. Tuition & Fees Deduction

9. Tuition & Fees Deduction
Eligibility
Taxpayer, spouse, dependent
Cannot be claimed by a dependent or married filing separately
If students are eligible to be claimed as a depended (even if not actually claims) and paid their own expenses, no one can take the adjustment.
Students who do not qualify as a dependent can claim the deduction, even if tuition and fees were paid by someone else. (treat as gifts)