LA ORT Wants You to Save Money on Your Taxes
Did you know that higher education expenses are some of the most overlooked deductions during tax season? It’s true. Don’t miss out on your chance to save some money.
To make education more affordable, the Taxpayer Relief Act of 1997 provided for tax benefits for students pursuing higher education.
LA ORT students and their parents may be able to take advantage of some tax credits, tuition and fee deduction, student loan interest deduction and even certain IRA withdrawals.
Tax Day is April 15. If you’re a student, you may be eligible for tax benefits. Consult your tax advisor or see IRS Tax Benefits for Education.
American Opportunity Credit
The American Opportunity Credit helps make postsecondary education more affordable. To qualify for the American Opportunity Credit, you must be pursuing a degree or certificate at a recognized institution, have not yet completed four years at the beginning of the tax year, carry at least half the full-time course load and not have any drug convictions. If you qualify, it can save you (or your parents) up to $2,500.
Credit amount includes tuition, fees and course-related books, supplies and school equipment.
If the credit amount is larger than the amount of tax you owe, you can get up to $1,000 of the credit refunded.
Lifetime Learning Credit
The Lifetime Learning Credit helps parents and students pay for post-secondary education if they can’t claim the American Opportunity Credit. Any taxpayer taking least one college course during the year is eligible for the Lifetime Learning Credit. You can claim the credit for any post-secondary classes you take, even graduate school; you don’t have to be working towards a degree.
You can earn up to $2,000 from this credit.
This credit is nonrefundable, even if the credit value is larger than your tax bill.
To claim your tax credits for attending college, you need to fill out the
IRS Form 8863.
Not eligible for the tax credits? You can still claim a deduction.
Tuition deductions aren’t an itemized expense, which means anybody can take the deduction.
The catch: You can’t claim more than one tax benefit per student each year. That means you can’t claim a deduction and a credit in the same year.
If you have student loans, you may choose to claim a tax deduction on the interest you paid during the tax year. You can deduct up to $2,500.
You can take withdrawals from an IRA to pay for your higher education without the usual penalties.
For most students, the American Opportunity credit provides the best tax savings. Whether a tax credit or deduction, every student at LA ORT should be eligible to save on his or her taxes. Don’t miss out! Check with your tax advisor or consult the IRS. There several other opportunities to save money on your education at LA ORT College, speak to an advisor today. We hope that everyone at LA ORT has a stress-free tax season.