The Federal Tax Credits Blog

Posts Tagged ‘college’

Learn to Use the Lifetime Learning Credit!

Question: Tax Return question-College Credits?

So, I understand there’s the American Opportunity Credit, the lifetime learning and the the Hope Credit. I’m a sophomore in college. can someone explain to me the difference and when I would want to claim one over the other. Can I only claim one?
There’s also a tuition and fees deduction?

Answer: The American Opportunity Credit is an extension of the Hope Credit for 2009 and 2010. To be eligible for AOC, you have to be an undergrad (first 4 years of college), enrolled at least half-time for at least 5 months, and pursuing a degree. AOC is calculated as 100% of the first $2000 of qualified expenses and 25% of the next $2000 (max credit $2500). Up to 40% of the credit could be refundable, depending on conditions.

This year you can only claim the Hope Credit if you are a student in a Midwestern disaster area and are not claiming the AOC for any other student. Like AOC, you have to be an undergrad, enrolled at least half-time, and pursuing a degree, but you can only use it for 2 years and only if you haven’t completed your freshman or sophomore years yet. It is calculated as 100% of the first $1200 of qualified expenses and 50% of the next $1200 (max credit $1800) – or for a Midwestern disaster area student: 100% then 50% of $2400 for a max of $3600 – and it is nonrefundable.

The Lifetime Learning Credit is available for both undergrad and graduate work and for work-related classes. You do not need to be going to school half-time or pursuing a degree. LL is calculated as 20% of qualified expenses up to $10,000 (max credit $2000) and none of it is refundable.

Qualified expenses for Hope and LL are tuition, fees, and books/supplies/etc purchased from the college. Qualified expenses for AOC are tuition, fees, and all books/supplies/etc no matter where they were purchased.

You can only claim one credit per student. A college sophomore, assuming you attend at least half-time for at least one semester and are going for a degree… your best choice would probably be the AOC. But if your parents can still claim you as a dependent, they’d be the best ones to claim the credit – they can get the refundable part. The only way you can is to be married, an orphan, or supplying more than half of your own support.

Well played, Mr. President — Obama’s very good week

Despite howls from the left, writes David Brooks, Obama and the Democrats had an excellent week. With little leverage, White House negotiators got not only unemployment insurance, but also an Earned Income Tax Credit provision, a college scholarship provision and other Democratic goodies.

KUJH-TV News: New tax credit will benefit college students

Question: The American Recovery and Reinvestment Act states that students get a tax credit up to $2,500….?

It states that up to 40 percent ($1,000) is refundable, and can be received as a credit in the form of a rebate if you do not owe on your taxes. Does this mean that if I pay college tuition I should get at least $1,000 back at the end of the year?

Answer: This replaces the Hope credit and is possible for 4 years of school.

1. Spend $4000 on undergraduate tuition Get a $2500 credit. You use it first to pay taxes, but if you don’t owe tax, up to $1000 can be refunded anyway. Books may or may not be counted (save your receipts).

The calculation is 100% of the first $2000 and 25% of next $2000.

2. The school must be eligible.

3. The credit goes on the same tax return as the exemption. If you are a student subject to kiddie tax, you will NOT be eligible.

4. Income must be less than the cutoff. $80K for singles. $160K for MFJ.

With eye on future, Obion County native reflects on past

By GLENDA CAUDLE Special Features Editor “What has changed is the immediacy of the thing. We must do something right now in Washington and the first thing I will do is cut spending — 10 percent cuts across the board in every program and agency.”

Obama Proposes Tax Credit for College Tuition

Question: I got screwed out of my stimulus because I am over 17 make over 3k but I’m claimed from my parents.?

My parents claimed me while I am in college to try to get a tax break…I am 21 years old have my own home which I have a mortgage for…I go to school 20 credit hours in college and work 42 hours full time job and make over 3k per year. I got screwed out of my Stimulus when college kids trying to save for their tuition and still try to have a life should get this money!! I work hard!!
I am on good terms with my parents. And well I mean my parents did pay for everything when I was a child and middle school and until I was old enough to get a job … so I think I would feel guilty to ask for it ya know??
And saying my parents did it for a tax break sounds bad… I didn’t mean it like they are swindlers. Most people claim their children through college so its not like a “tax break” as I called it.

Answer: The parents do NOT get any extra for a college kid on their stimulus because you don’t get it for dependents over 17. So where does these kids 300.00 go? The parents get a break on their actual taxes but nothing extra on their stimulus.

Obama continues touting tax credits for clean-energy manufacturing

President Barack Obama wrapped a two-day sales pitch for his administration’s economic policies by pushing for a $5 billion expansion of tax credits for clean-energy manufacturing, an industry that recession-worn Nevada has clung to as a potential lifeline.

The Earned Income Tax Credit Obamas Stimulus Welfare Scam

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.

CHANGEBLUEPRINT #78 Obamas Plan for America