Qualified Higher Education Expense

Everyone keeps telling us that it’s never too late to go back to school, but when we look at how much it costs—tuition, books, fees, computer supplies, housing, etc.—we start thinking that it might not be too late, but it definitely might be too expensive.

Luckily, the IRS is here to give us a break. Some of the costs associated with getting a post-secondary education, whether that means heading off to a university or enrolling in a vocational program, can be used to reduce or offset our tax debt. We call those costs “qualified higher education expenses,” or QHEEs, which we like to pronounce “kweez.”

In general, costs like tuition, room and board, books, and various and sundry educational fees are tax-deductible (up to a certain dollar amount). If we use the proceeds from any savings bonds we’ve got hanging around to pay for our education, we can also deduct the interest from said bonds from our taxes. If we decide to withdraw some cash from the old IRA to pay for school, even if we’re not 59 ½ years old yet, we can get a tax break on the early withdrawal penalty. These are some good tax bennies, folks, and they can really help a post-secondary education look a little more financially attainable.

Of course, there are rules and regulations, qualifiers and codicils, so if we’re wondering how much of this tax break goodness we’re eligible for, it’s probably best to consult an expert.