The Federal Tax Credits Blog

Archive for the ‘Education Tax Credits’ Category

Question: What is the student credit TAX $2500?

Hi
I am a student my collage tuition was about 2100 and financial Aid paid about 2000, how do I know if I’m qualified for the 2500 Credit Tax?
thanks

Answer: You don’t include tuition costs paid by grants/scholarships; however, you can include student loans and out-of-pocket tuition paid. The credit offsets your tax liability. If you don’t have any tax liability, the 40% of the credit is refundable.

If you only paid $100 in tuition and had no student loans, then you could receive $40 back (assuming you have no tax liability).
If you had $10,000 in student loans and paid $100, then you would use the maximum $2,500 for the credit. This would give you a refund of $1,000 (assuming you have no tax liability).

Tax Break for Gun Buyers in the Works

West Virginia lawmakers want to give gun buyers an annual break from the state sales tax.

Hefty Tax Returns for Parents and Students

Question: Should I use my home equity line of credit to pay off my car loan and part of my student loan?

By using the HELOC, it’s going to free up several hundred dollars per month, and I can claim it as a tax deduction at the end of the year. On the other side, I’m eating up a sizable amount of home equity by doing so. I’m planning to pay them off either way–I can do it now with the HELOC, or after I sell my house, with the cashed in equity. Which route should I go? Does it make a difference?

Answer: Generally speaking, debt is debt, so whether it’s debt on your HELOC or a student loan or car doesn’t matter. Using your HELOC is usally a better deal because the rates are lower and as you mentioned, you can deduct the interest. The only thing I would caution is if the property values in your area are going down, you may not want to extend your HELOC too much and end up with either no equity or oweing more than the house is worth.

Top Scoops

On Feb 8 Scoop published my article Personal Income Tax Reform in New Zealand , which looks at taxes for individual New Zealand wage and salary earning tax residents.

PRIVATE STUDENT LOAN CONSOLIDATION (No Credit Check)

Question: Question about education expenses, deductions, and credits on taxes?

Well my question is if I received a 1098T, and it has something listed in the tuition section (I was a student for the first half of 2009), does that mean I can qualify for the tax refund thing? Basically the reason I’m confused is while I did have the huge tuition bill, I paid it with student loans, not from my bank account. Does that disqualify me from listing it on my taxes, or not?

If that didn’t make sense I will add more info, this is my first year of filing “real” taxes (b/c I graduated college in 2009 and got a real job shortly after), so I don’t know all the fancy terms yet. I’m using TurboTaxOnline. Thanks!

Answer: Paying with loans is the same thing taxwise as taking the money out of your bank account, since you have to pay back the loans. Expenses paid with grants or scholarships are not eligible for an education credit.

Tax credits for college credits

Tax-advantaged strategies to fund children’s college education continue to offer CPA clients some relief from that heavy financial burden, but their value will vary widely according to each taxpayer’s financial picture.

FastWeb Insider Secrets: Education Tax Benefits

Question: Income tax return question , form 8863?

My income is 20,000 and my status is marriage jointly return. In 2009, I paid for my college tuition, that’s my sophomore of B.A degree. So can I claim it on form 8863 for education credit :”American Opportunity credit”, Thanks

Answer: Yes, you should be able to claim the American Opportunity Credit. To claim the credit you must
-Not file married filing separate;
-If married, your income (MAGI) is less than $160,000-180,000;
-Not be claimed as a dependent on another person’s tax return, and
-You or your spouse was not a nonresident alien for any part of the year.

Also with this credit, you can include not just tuition, but also fees and course materials (i.e. books, supplies and equipment needed for your courses.)

Derel DallOlmo: New tax rules

Few things induce more anxiety this time of year than the looming April 15 income tax filing deadline. As you begin the process this year, keep in mind that tax rule changes could affect your tax liability and possibly make you eligible for new tax reduction opportunities.

Improved education credit opportunities for high-income taxpayers.: An article from: The Tax Adviser $9.95 This digital document is an article from The Tax Adviser, published by American Institute of CPA’s on March 1, 2010. The length of the article is 1184 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available immediately after purchase. You can view it with any web browser.Citation DetailsTitle: Improved education credit opport…

CHANGEBLUEPRINT #78 Obamas Plan for America

Question: if i started college in december but got loan in jan does that count for 2009 or 2010 taxes?

i started university of phoenix in december and applied for loans at that time but didnt get the funds till jan 12 to pay for classes starting in december does this count for taxes this year or next year? can i use the hope tax credit for this?

Answer: I would say that would be 2010 taxes, you didn’t actually get your money until January 2010.

Child Care, EITC, Tuition and Household Credits Can Boost IncomeTax Refunds

ALBANY, February 18, 2010– New York State Department of Taxation and Finance Acting Commissioner Jamie Woodward today urged qualifying taxpayers to take advantage of a host of family-friendly credits that lower tax bills and increase refunds.

Well Prepared for High School and College: Maryland’s Nonpublic Schools