The Federal Tax Credits Blog

Posts Tagged ‘financial_aid’

Question: Should I buy a house or use savings to pay off student loans?

I have about 36k in student loans at 6.8% interest. I also have about 30k in savings and take home about 4k. The 8k federal tax credit for first time home buyers ends on Dec 1 so I am wondering if I should just pay down my student loans or use the savings to buy a house. Case for buying home: 1. mortgage rates in the 5%s 2. lots of houses/condos for sale 3. 8k federal tax credit
Case of paying off loans: 1. come close to being debt free

Any advice would be appreciated.

Thanks.

Answer: I would put the money towards the loan if it were me. Get that student loan out of your hair asap. You take home 4k a month I assume, so over the next year set aside 2k as a down payment to a house – make double or triple payments on the last 6k of the loan and in a year you’ll have a decent down payment for a house and that loan should be almost completely gone. You’ll be able to get into your house without another big loan hanging over your head.

Most of the case for buying a home will still be there in a year. Interest rates are not going to go shooting back up anytime soon. There will still be plenty of houses for sale. As for the 8k tax credit, it’s a little bit of a help but when compared to the hundreds of thousands that you’ll end up paying for a house 8k is maybe 2% of that. Not to say that it isn’t some help but in your case I think paying off the student loan would be the priority.

IRS extends tax deadline to April 18; those with offshore accounts are warned to pay up; itemizers must wait to file

The Internal Revenue Service opened the 2011 tax filing season by announcing that taxpayers have until April 18 to file their tax returns. The IRS reminded taxpayers impacted by recent tax law changes that using e-file is the best way to ensure accurate tax returns and get faster refunds.

The Student Loan Scam: The Most Oppressive Debt in U.S. History – and How We Can Fight Back $22.95 Alan Collinge never imagined he would become a student loan justice activist. He planned to land a solid job after college, repay his student loan debt, and then simply forget the loans ever existed. Like millions of Americans, however, in spite of working hard, Collinge fell behind on payments and entered a labyrinthine student loan nightmare.High school graduates can no longer put themselves thr…

The effect of tax-based federal student aid on college enrollment.: An article from: National Tax Journal $9.95 This digital document is an article from National Tax Journal, published by National Tax Association on September 1, 2011. The length of the article is 10294 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.From the author: JEL Codes: 123; 128; H29Citat…

Democratic platform promises more for education: education plan includes a tax credit for college students who perform community service and grants for … from: Diverse Issues in Higher Education $9.95 This digital document is an article from Diverse Issues in Higher Education, published by Cox, Matthews & Associates on September 18, 2008. The length of the article is 789 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: Democratic…

Question: How much do I owe in taxes?

I’m a college student who gets $14,000 in scholarships per year. My tuition and fees expense for this year is approximately $4,666. My parents cover what my scholarships don’t cover and are going to try to get the tax credit for education (American Opportunity) that is in ARRA, the stimulus package. I read the IRS publications concerning scholarships and taxability, and it says that money that goes towards room and board is taxable. Because I make more than my exemption, do I still have to file taxes? How much do I owe? I’m still my parents’ dependent.

Answer: You will not owe anything. This will be handled on your parents return. Hopefully they will have a professional handling it. They will receive a 1099 regarding what was paid in scholarship and should know what they paid.

Readers chime in on Stimulus Tracker series

Reader reaction to the Stimulus Tracker series was largely negative.

Did You Know? The RE/MAX Edition 3.1

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.”

The Student Loan Scam: The Most Oppressive Debt in U.S. History – and How We Can Fight Back $22.95 Alan Collinge never imagined he would become a student loan justice activist. He planned to land a solid job after college, repay his student loan debt, and then simply forget the loans ever existed. Like millions of Americans, however, in spite of working hard, Collinge fell behind on payments and entered a labyrinthine student loan nightmare.High school graduates can no longer put themselves thr…

Considerations when using education credits.: An article from: The Tax Adviser $5.95 This digital document is an article from The Tax Adviser, published by American Institute of CPA’s on January 1, 2000. The length of the article is 4028 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.Citation DetailsTit…

Federal tax policy in the making: 32 years to enact college tuition tax credits.: An article from: Review of Business $5.95 This digital document is an article from Review of Business, published by St. John’s University, College of Business Administration on January 1, 2002. The length of the article is 5071 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with an…

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: Are you looking for a hand out – how will he do it?

OK lets see:
you are gonna get a gov health care
Stimulus rebates 2 times a year
double the eic (EIC Tax Credit) OH..I am sure you already know what that is don’t ya ?
tax cuts for 95% of the country..
SO what are we going to cut ?
armour for the troops ?
Education for the kids
Medicare for seniors
disability
What What WHat is gonna give.
Just who – please tell me who is going to pay for all this ?

Answer: I’m sure not going to expect anything. I am retired military and drawing a pension. I’ve been hounded to file for the stimulus rebate for 2 months. I manage ok on my pension even though some months get a bit tight.

I didn’t file for the stimulus rebate and i’m not going to ask for a damn thing…

Future generations of Americans our Grand Children and even their great grand children are going to be paying through the teeth for all this ridiculous spending that’s going on.

Add to your list the illegals who Obama will allow access to draw social security without contributing.

I visited Obama’s website. He has a tax calculator on his site. I entered my pension income and it says i’ll pay $500 dollars less on my pension than i would under mccain’s plan. Under the current tax structure I don’t have to pay taxes and wouldn’t under McCain’s plan either. So I wonder how Obama is doing the math.

I voted last friday for John McCain.

States stymied by school stimulus rules

Auditor-general says federal guidelines hampered state authorities from implementing the Government’s $16.2 billion schools building program.

How Does the Stimulus Work? Rescuing the Economy