Identification

• Until 2009, the IRS almost never considered college textbooks a qualified expense unless the institution required it for terms of enrollment. In 2009, the federal government increased the value of the Hope tax credit, renamed it the American Opportunity credit and allowed textbooks as a qualified expense as part of this overhaul. Textbooks are also a qualified expense for tuition deductions.
  
  

Considerations

• You cannot deduct books for college if you pay for them with a non-taxable scholarship -- you have already received your tax benefit in this case. Also, you must meet the qualifications of the credit or deduction you want. Most phase out once the taxpayer earns $90,000 or more. Only the person paying for the books can claim the expense and the purchase had to occur during the year for which you are preparing your taxes.
  
  

Amount

• If you take the tuition tax deduction, you can only deduct $4,000 in total expenses, including fees and other required costs. Also, you cannot claim another education tax incentive, such as the American Opportunity credit or the Lifetime Learning credit. The tuition deduction, however, is "above the line." This means you can deduct the cost of the books without itemizing. The amount of the deduction can bring down your taxable income to meet the income requirements of it. This could also qualify you for other deductions and expenses.
  
  

Tip

• H&R Block suggests keeping receipts for all textbooks you purchase in case the IRS audits your return. You can take the deduction for any class except sports, hobbies or games.