Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 09-30-2014, 06:40 PM
TaxGuru's Avatar
Tax Guru
 
Join Date: Jan 2007
Location: New Jersey, USA
Posts: 2,417
Blog Entries: 3
IRS offers "2014 Summertime Tax Tips"!

According to the IRS. "If you, your spouse or a dependent are heading off to college, then there are several potential tax credits available to you (as shown below)."

The IRS offers several important facts you should know about education tax credits. These are described by the IRS as follows:

1) American Opportunity Tax Credit.
The AOTC can be up to $2,500 annually for an eligible student. This credit applies for the first four years of higher education. Forty percent of the AOTC is refundable. That means that you may be able to get up to $1,000 of the credit as a refund, even if you don’t owe any taxes.


2) Lifetime Learning Credit.
With the LLC, you may be able to claim a tax credit of up to $2,000 on your federal tax return. There is no limit on the number of years you can claim this credit for an eligible student.


3) One credit per student.
You can claim only one type of education credit per student on your federal tax return each year. If more than one student qualifies for a credit in the same year, you can claim a different credit for each student. For example, you can claim the AOTC for one student and claim the LLC for the other student.


4) Qualified expenses.
You may include qualified expenses to figure your credit. This may include amounts you pay for tuition, fees and other related expenses for an eligible student. Refer to IRS.gov for more about the additional rules that apply to each credit.


5) Eligible educational institutions.
Eligible schools are those that offer education beyond high school. This includes most colleges and universities. Vocational schools or other postsecondary schools may also qualify.


6) Form 1098-T.
In most cases, you should receive Form 1098-T, Tuition Statement, from your school. This form reports your qualified expenses to the IRS and to you. You may notice that the amount shown on the form is different than the amount you actually paid. That’s because some of your related costs may not appear on Form 1098-T. For example, the cost of your textbooks may not appear on the form, but you still may be able to claim your textbook costs as part of the credit. Remember, you can only claim an education credit for the qualified expenses that you paid in that same tax year.


7) Nonresident alien.
If you are in the U.S. on an F-1 student visa, you usually file your federal tax return as a nonresident alien. You can’t claim an education credit if you were a nonresident alien for any part of the tax year unless you elect to be treated as a resident alien for federal tax purposes. To learn more about these rules see Publication 519, U.S. Tax Guide for Aliens.


8) Income limits.
These credits are subject to income limitations and may be reduced or eliminated, based on your income.

__________________
Find a CPA near you!

Ask TaxGuru Please refer to the legal disclaimer.


Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply



Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Rool-over from "traditional after-tax 401k" to "Roth IRA" golf2000 IRA/Sep 1 09-27-2014 03:33 AM
IRS announces that "2014 Tax Filing TaxGuru For 2013 0 02-04-2014 02:51 PM
Government announces that the "Small Business Health Care Tax Credit is set to increase in 2014." TaxGuru For 2013 0 12-03-2013 08:06 PM
The New Health Care law offers "Small Business Health Care Tax Credit" TaxGuru Medical 2 08-05-2013 06:42 AM
The IRS requires "Many Tax Return Preparers Required to Use IRS e-file Beginning in 2011!" TaxGuru CPA Forums 0 10-13-2010 10:03 AM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning
 
 
 

» Recent Tax Q&A
No Threads to Display.