Tuesday, January 19, 2016

Education Tax Credits

Education Tax Credits
Brief Summary 

Do you pay for the higher education of yourself or a dependent?  We would like to offer our sympathies for the loss your wallet has likely felt.  Allow us to offer a small conciliation. The IRS offers some great tax credits/deductions that offset much of the financial pain most families have felt.  Review this brief outline to see if any of these credits apply to you!

American Opportunity Tax Credit
Receive up to $2,500 in tax credits per student! This credit applies to individuals that have paid for tuition, fees, and books for them self or a dependent. The education must be for the first 4 years of higher education, must be in pursuit of a degree, and is phased out for higher income families.

Lifetime Learning Credit
Worth up to $2,000 per tax return.  It applies to all higher education including vocational schools and does not necessarily have to be attached to a degree (for instance, career advancement).  This credit is phased out for higher income families.

Student Loan Tax Deduction   
Did you make payments on a student loan in 2015?  You should receive a form 1098-E in the mail.  This will give you the amount of interest included in your payments that may be deducted.

College Funds (529 Savings Plans) 
 529 Savings Plans are a great way to store your child's college fund.  Contributions are deductible on your Ohio (and most other states) tax return and income is generated within the account federal and state tax free. 

More questions?  Do not hesitate to ask! Contact Us 

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