There’s no direct tax write off for a laptop for school, but there are usually other education tax credits you can claim.
There is no itemized deduction for education expenses.
There is no itemized deduction specifically related to education expenses including laptops.
Education expenses are classified as personal expenses. They don’t reduce your income.
In other words, there’s no place to put on your income tax return that you spent $1,000 for a laptop. You can’t take a $1,000 tax deduction (or whatever you spent).
You may be eligible for the American Opportunity Tax Credit or Lifetime Learning Credit if you buy a laptop for school.
Purchasing a laptop may be considered a qualified educational expense for education tax credits. There are two education credits — the American Opportunity Tax Credit and the Lifetime Learning Credit.
Both education credits have an income limit that may change each year. The limit is generally above the median income for someone working full time, so most students won’t be close to the limit.
American Opportunity Tax Credit
A laptop will usually qualify as equipment related to education for the purposes of the American Opportunity Tax Credit. The AOTC gives you up to a $2,500 tax credit towards the cost of tuition, books, supplies, and equipment.
To get the full credit, you have to have actually spent at least that much. Otherwise, it’s capped at what you spent.
Up to 40% of the American Opportunity Tax Credit is refundable. If that adds up to more than you owe in taxes, you can get a refund.
Lifetime Learning Credit
For the Lifetime Learning Credit, you generally need to have purchased the laptop from your educational institution as a condition of enrollment. The condition of enrollment usually must be that you buy the laptop FROM the school.
- You generally can’t buy it from another store or directly from the computer manufacturer. It’s not enough that you’re required to have a laptop.
- You generally can’t choose to buy it from the school but have the option to buy it elsewhere. If you have a choice of where to buy the laptop, it’s not a condition of your enrollment to buy it FROM the school.
The Lifetime Learning Credit is worth up to 20% of your qualifying education expenses up to a maximum of a $2,000 credit.
The Lifetime Learning credit is not refundable. If you don’t owe any taxes, you won’t get any money back.
You can’t use tax-free funds.
To qualify for the education credits, you usually can’t use tax-free funds to buy your laptop. So if you get a tax-free grant or scholarship and buy your laptop with it, you can’t also count it as a qualified education expense to get a tax credit.
You generally can take a tax credit if you buy a laptop with student loan money since you have to pay the loan back with your own money.
In some cases, your laptop, tuition, books, and other qualified expenses may cost more than the tax-free money you got. In that case, you can count the difference towards your tax credit.
For example, say you got a $1,000 grant and paid $2,500 in education expenses. You have to subtract the grant but can still use the remaining $1,500 in education expenses to qualify for a tax credit.
What happens if you withdraw from your classes?
You can generally still count things as qualified education expenses if you didn’t get a refund for them. This can depend on when you withdrew since the education credits still require you to meet their enrollment requirements.
In the case of a laptop, you may have a little difficulty if the IRS audits you. If you continue to use the laptop for other things instead of selling it, the IRS might try to say you didn’t really buy it for educational use.
How do you prove the cost of your laptop?
Just like other tax deductions or credits, you will need to save your receipt. Keep it for at least three years after you file your tax return in case of an audit.
Can you get a tax credit if a parent or other relative buys you a laptop for school?
Whenever a parent, relative, or friend pays for your educational expenses, the IRS considers those expenses to be paid by you for the purposes of the American Opportunity Tax Credit and Lifetime Learning Credit. You get the tax credit (if eligible) the same as if you were the one who paid for the laptop.
You will generally still need to have the receipt to prove the cost of the laptop if you get audited. If you’re unable to get the receipt, you may want to save the webpage or print ad showing the cost of the laptop at the time you received it. The IRS may or may not accept the ad as adequate proof.
If you’re a dependent on someone else’s tax return, that person gets the tax credit. Dependents can’t claim either education tax credit. Even if you paid for the laptop yourself, you can’t get a tax credit for it unless you’re not a dependent.
What if the courses are part of my job?
Previously (through 2017), you may have been able to deduct work-related education expenses, such as the cost of a laptop, as an unreimbursed employee expense. Beginning in 2018, employees may not deduct unreimbursed expenses even if they itemize their deductions. This deduction was replaced by the increased standard deduction.
If you are self-employed, you may be able to claim a deductible business expense. The course would need to relate towards continued professional education not education that qualifies you for a new field. In addition, you would only be able to deduct the portion of the cost related to business or eligible educational use. If you use the laptop for personal reasons, you would lose all or part of the deduction.
Where can you get help with a student tax return?
If you need help filing a student income tax return, most online tax software has the guidance you need. Depending on your other sources of income, you will often qualify to file for free.