|
ALBANY - The federal American Opportunity Tax Credit provides a taxcredit of up to $2,500 per student to offset qualified highereducation expenses. Every dollar of tax benefits reduces the needfor funds from more expensive sources, like loans. Students andfamilies with higher education expenses need to remember these alltoo often overlooked educational benefits as they prepare their2011 federal and state tax returns. Here are some key features of the American Opportunity Tax Credit: The credit is equal to 100 percent of the first $2,000 spent, and25 percent of the next $2,000 spent on qualified higher educationexpenses. That means the full $2,500 credit may be available to ataxpayer who pays $4,000 or more in qualified expenses for aneligible student. Tuition, related fees, books and other required course materialsgenerally qualify. The credit is available for taxpayers whose modified adjusted grossincome is $90,000 or less - for married couples filing a jointreturn, the limit is $180,000. The credit is phased out fortaxpayers with incomes above $80,000 - $160,000 for married couplesfiling jointly. Forty percent of the American Opportunity Tax Credit is refundable.This means that even people who have no tax liability can get apayment of up to $1,000 for each eligible student. This credit applies for the 2009 through 2012 tax years. Parentsand students may claim the credit on their 2011 tax returns, andmay amend their previous returns if they were eligible but did nottake advantage of the credit. For details on the American Opportunity Tax Credit and the othereducation-related tax benefits, see IRS Publication 970. The American Opportunity Tax Credit is allowed for 4 tax years pereligible student. Education expenses for additional tax years maystill qualify for the Lifetime Learning tax credit. The lifetime learning tax credit Up to $2,000 in Lifetime Learning Tax Credit may be claimed forqualified education expenses per tax return. The qualifying studentcan be anyone in the family who appears on your tax return. If youclaim the American Opportunity credit for one or more students inyour family, you can't apply their expenses to a Lifetime Learningcredit. However, you can still take a Lifetime Learning credit forfamily members who have exhausted or are not eligible for theAmerican Opportunity Tax Credit. This may be especially helpful forgraduate students. The maximum credit that can be received is limited to the tax youowe. You are eligible for the credit if your modified adjustedgross income is $61,000 or less - for married couples filing ajoint return, $122,000 or less. However, the credit is phased outfor taxpayers with incomes above $51,000 - $102,000 for marriedcouples filing a joint. Tuition and fees deduction Alternatively, taxpayers can claim a tuition and fees deductionthat can reduce a taxpayer's income subject to tax by as much as$4,000. The deduction is taken as an adjustment to income sotaxpayers need not itemize their deductions to claim it. It isavailable to taxpayers whose modified adjusted gross income is$80,000 or less - for married couples filing a joint return, thelimit is $160,000. The deduction is reduced for taxpayers withincomes above $65,000 - $130,000 for married couples filingjointly. The 1098-T statement The information you will need to take the American Opportunity orLifetime Learning tax credits, or the Tuition and Fees deduction,will be included on a 1098-T statement you should receive from yourcollege either by mail or electronically. The 1098-T lists theamount billed and payments received by the college, anyscholarships or grants received by the student, and reimbursementsor refunds issued by the college. Student loan interest deduction The Student Loan Interest Deduction can reduce your taxable incomeby as much as $2,500. It is taken as an adjustment to income, whichmeans you can take this deduction, even if you do not itemizedeductions on the Schedule A form of Form 1040. You can deduct theinterest paid on a student loan taken for yourself, your spouse ora family member. The amount of the deduction is dependent upon theamount of interest paid and your income. You are eligible for thededuction if your modified adjusted gross income is $75,000 or less- $150,000 or less if filing a joint return. Look for a 1098-Estatement from your student loan lender or servicer that will listthe amount of student loan interest paid by the borrower. New York State offers college tax relief, too New York State offers a college tuition credit of up to $400 foreach eligible student or up to a $10,000 deduction for eacheligible student, depending on which is better for you on your 2011State taxes. A full-year New York State resident, not claimed as a dependent onsomeone else's return may claim the credit. However, a New YorkState resident, nonresident, or part-year resident may be eligiblefor the deduction. You, your spouse or other dependent familymember must have been an undergraduate student and paid qualifiedtuition expenses. To see if you qualify and determine whether the credit or deductionis best for you, visit the New York State Taxation and FinanceDepartment website and review the instructions for Form IT-272. The e-commerce company in China offers quality products such as Snowmobile Rubber Track , Silicone Air Intake Hose, and more. For more , please visit Aluminum Radiator Hose today!
Related Articles -
Snowmobile Rubber Track, Silicone Air Intake Hose,
|
