The IRS has released their report on 2008 tax data.
It's 190 pages of engrossing reading.
Ok, maybe not, but it does serve as a useful guide for answering that annual question: How much can I deduct?
The correct answer, of course, is: you can deduct what you actually paid (assuming you can deduct anything, of course), and not a penny more. But for those clients who are skittish about taking the deduction in the first place (I've had clients refuse to take perfectly legit deductions because they were certain if they did, they'd be audited), or who are worried that their deductions are abnormally high (clue: if you make $40,000.00 a year, and claim $15,000 in charitable contributions, you don't need this guide to tell you the answer is 'yes') this is a good starting point for discussion.
In general, the data is broken down by income range, and some tables show the amount of the deduction/credit, others show the actual amounts, and still others show both, so it should go without saying that you should take the time to read the footnotes and headings to make sure you don't misinterpret.
What will you find?
Well, for example, the report will tell you that 1.2 million taxpayers making between $30,000 and $40,000 per year took education credits on their 2008 returns. Ironically there were fewer taxpayers in the next bracket - $40-50,000 - who took education credits (972,000), though the number bumped up to 1.3 million for those making between $50 and $60,000.00.
(Why the drop? Reasons abound, but one reason could be that these people were not aware of the credit, which would provide a planning opportunity for their preparers that is being missed.)
While falling into the bands suggested by this report won't protect you from audit, falling outside (if you're, say, one of the 539 people with no AGI who took the credit) the normal range is a good way to get the IRS' attention.
It's a big file, so it will take a bit to download, but it's an interesting read if you've got time to kill (you know, like when you're on hold with the IRS).