I want to thank you all for the ongoing support during the last couple of years while I studied to be an Enrolled Agent. It was a long road but it was worth it!
As you know, summer is almost over and you have a child going away to college soon.
Here are a few things about how your college student will affect your taxes.
As long as you are still supporting them, and they are attending school full time, and they meet the age guidelines, you can still claim them on your taxes.
There are also a few credits available to you now.
The American Opportunity Tax Credit can be up to $2500 per eligible student! This credit is available for the first four years of post-secondary education. 60% of the credit lowers your tax bill while the other 40% is refundable, meaning that you could get up to $1000 back as a refund! Qualified expenses for this credit include tuition and fees, course related books, supplies and equipment. Recently, the law extended this credit through December 2017!
The Lifetime Learning Credit has no limit on the number of years it can be used for an eligible student. You may be able to claim up to $2000 on your federal tax return for qualified expenses.
You cannot claim both credits for the same student but you can use one credit per each student if there is more than one eligible college student in your household.
If you have student loans in your name, then you may be able to deduct student loan interest from your taxes. The deduction can lower your taxable income up to $2500.
Education benefits are subject to income limitations and may even be completely phased out depending on your income.
If you have any questions, call me directly at 881-235-5406.