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Getting the Most from the Man

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Tax time is upon us again. Some of you are college students that work part time/full time and a lot of you are just college students with no jobs (LUCKY!). Well the great thing is if you are in either category you qualify for some tax breaks. Here is a list of just a few you can use this tax season.

American Opportunity Credit

Students can use a federal education credit to offset part of the cost of college under the new AOC. The maximum $2,500 credit is available to eligible taxpayers who paid at least $4,000 in qualified college tuition, fees and required course materials, including books, in 2009. The full credit is available to individuals with incomes up to $80,000, phasing out above that level and disappearing completely at $90,000. (For married couples filing jointly, the full credit is available to those with incomes up to $160,000 and disappears above $180,000.) Those income limits are higher than under the existing Hope and Lifetime Learning credits. If you claim the credit and owe no tax, you may receive a refund of 40% of the credit, up to a maximum of $1,000 for each eligible student. Other education credits are not refundable. The AOC can be applied only to expenses paid during the first four years of college.

Tuition and fees deduction

Students can reduce income subject to tax by up to $4,000 for tuition and related expenses. Qualifying expenses are the tuition and fees required for enrollment or attendance at an eligible college, university, or vocational school. You, your spouse or your dependent must have incurred these expenses.

Student loan interest deduction

Students, who took out student loans, may be able to deduct up to $2,500 in interest paid yearly. To qualify, you must have used proceeds from the loan toward qualified higher education expenses, including tuition, fees, room, board, supplies, and other related expenses by you, your spouse, or dependent.

For more information on these taxes and others, check out the following links here, here, and here.