FAQ: Deductions

October 1, 2012

Question: Can I deduct separate maintenance paid to my spouse or alimony paid to my former spouse?


If you are separated or divorced, you may generally deduct payments of separate maintenance or alimony paid in cash (including check or money order payable on demand) to, or on behalf of, your spouse or former spouse.


Question: Am I eligible to claim both my job-related education expenses (minus 2% of AGI) and the Lifetime Learning Credit on my tax return?


If you are eligible to deduct educational expenses and are also eligible for one of the education credits (the Lifetime Learning Credit or the American Opportunity Tax Credit), then it is possible to claim both. You cannot use the SAME educational expenses to claim both benefits (no “double benefit”).

  • You may choose to allocate some of your expenses to the deduction and others to the credit.
  • This can be desirable because a qualifying expense for one benefit may not be a qualifying expense for the other tax benefit. For example, the cost of course-related books ordinarily qualifies for the deduction, but not for the Lifetime Learning Credit. For tax years beginning in 2009 and 2010, course-related books may qualify for the American Opportunity Tax Credit.



Question: What types of work-related educational expenses are deductible?


Deductible work-related educational expenses include:

  • Amounts spent for tuition, books, supplies, laboratory fees and similar items.
  • Transportation and travel expenses to attend qualified educational activities may also be deductible.



Question: Is interest on a home equity line of credit deductible as a second mortgage?


You may deduct home equity debt interest, as an itemized deduction, if all the following conditions apply:

  • You are legally liable to pay the interest
  • You pay the interest in the tax year
  • The debt is secured with your home
  • The home equity debt is limited to the fair market value of the home reduced by home acquisition debt, up to a total of $100,000.