American Opportunity Tax Credit
I'm on some IRS mailing lists, and they sent me something that I thought should be past on. If you're paying tuition this year or last, read this.
Six Facts about the American Opportunity Tax Credit
There is still time left to take advantage of the American Opportunity Tax Credit, a credit that will help many parents and college students offset the cost of college. This tax credit is part of the American Recovery and Reinvestment Act of 2009 and is available through December 31, 2010. It can be claimed by eligible taxpayers for college expenses paid in 2009 and 2010.
Here are six important facts the IRS wants you to know about the American Opportunity Tax Credit:
Complete details on the American Opportunity Tax Credit and other key tax provisions of the Recovery Act are available at IRS.gov/recovery.
Also, I decided to look on Dave Ramsey's site today to see if he had any artilces that summed up my feelings on credit (credit cards in particular). Here's a good one: http://www.daveramsey.com/index.cfm?event=askdave/&intContentItemId=116425
Education is one of the very few areas where I think it can make sense to take out a loan. However only for those who are dedicated to their education and going into a relatively stable field who have a high probability of making enough to pay the loan off in a timely fashion. (Medical School for instance.) However it's best to exhaust all other options first.
Six Facts about the American Opportunity Tax Credit
There is still time left to take advantage of the American Opportunity Tax Credit, a credit that will help many parents and college students offset the cost of college. This tax credit is part of the American Recovery and Reinvestment Act of 2009 and is available through December 31, 2010. It can be claimed by eligible taxpayers for college expenses paid in 2009 and 2010.
Here are six important facts the IRS wants you to know about the American Opportunity Tax Credit:
- This credit, which expands and renames the existing Hope Credit, can be claimed for qualified tuition and related expenses that you pay for higher education in 2009 and 2010. Qualified tuition and related expenses include tuition, related fees, books and other required course materials.
- The credit is equal to 100 percent of the first $2,000 spent per student each year and 25 percent of the next $2,000. Therefore, the full $2,500 credit may be available to a taxpayer who pays $4,000 or more in qualifying expenses for an eligible student.
- The full credit is generally available to eligible taxpayers who make less than $80,000 or $160,000 for married couples filing a joint return. The credit is gradually reduced, however, for taxpayers with incomes above these levels.
- Forty percent of the credit is refundable, so even those who owe no tax can get up to $1,000 of the credit for each eligible student as cash back.
- The credit can be claimed for qualified expenses paid for any of the first four years of post-secondary education.
- You cannot claim the tuition and fees tax deduction in the same year that you claim the American Opportunity Tax Credit or the Lifetime Learning Credit. You must choose to either take the credit or the deduction and should consider which is more beneficial for you.
Complete details on the American Opportunity Tax Credit and other key tax provisions of the Recovery Act are available at IRS.gov/recovery.
Also, I decided to look on Dave Ramsey's site today to see if he had any artilces that summed up my feelings on credit (credit cards in particular). Here's a good one: http://www.daveramsey.com/index.cfm?event=askdave/&intContentItemId=116425
Education is one of the very few areas where I think it can make sense to take out a loan. However only for those who are dedicated to their education and going into a relatively stable field who have a high probability of making enough to pay the loan off in a timely fashion. (Medical School for instance.) However it's best to exhaust all other options first.