Posts Tagged ‘Education’

Hope Credit & American Opportunity Tax Credit

by P. Lewis Robinson
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Oct
18

The Hope Credit is a non-refundable tax credit available to students who were enrolled in their first two years of an undergraduate degree program. This credit is applied against qualified education expenses, which includes tuition and books. It is available through the 2008 tax year at a maximum of $1,800 per student.

In 2009, the Hope Credit was modified and is also referred to as the American Opportunity Tax Credit. For 2009 and 2010, the credit increases to $2,500 per student and up to 40% of this is refundable. In other words, the taxpayer may receive up to $1,000 even if he or she owes no taxes. Additionally, the credit can now be claimed for the first four years of a student’s post-secondary education. The qualified tuition and books requirements have also been expanded to include course materials, such as supplies and educational equipment.

Please stay tuned for details on other education credits and deductions.

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Credits & Deductions for Higher Education

by P. Lewis Robinson
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Oct
8

For those of you who attend college or have children who attend college, you may want to learn more about the higher education tax credits and deductions offered by the IRS.  The following list shows the credits and deductions available for the year 2009 with a brief summary of each. In the coming weeks, more detailed write-ups will follow for each individual item.

  • Hope Credit – not to be confused with the HOPE Scholarship/Grant available to Georgia students. This non-refundable credit is most beneficial to students in their first two years of post-secondary education and applies to tax years through 2008.

 

  • Lifetime Learning Credit –  no limit on the number of years the credit can be claimed, but it cannot be claimed in conjunction with the Hope Credit or American Opportunity Credit for the same student in the same year. This credit is often beneficial to graduate students.

 

  • American Opportunity Credit – modifies the Hope Credit for the 2009 & 2010 tax years, making it available to broader group of taxpayers. Many of those who are eligible will qualify for the maximum credit of $2,500 per student.

 

  • Tuition & Fees Deduction – deductions up to $4,000 can be taken for qualified education expenses paid for the taxpayer, spouse or any dependents. This deduction can be taken even if the taxpayer does not itemize.

 

  • Student Loan Interest Deduction – this deduction is available to taxpayers who paid student loan interest during the tax year. The maximum deduction is $2,500 and it can be taken even if the taxpayer does not itemize.
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