Summer has come to an end and school is in session! You decided to go back to school so now you have time figure out your finances of whether you have any tax deductibles or have any tax benefits! Here are some tips to get your through this complicated and hectic process and help you lessen your financial burden of heading back to school!
Meet with the Boss– Have a sit down with your employer and see if their company has any tuition reimbursement program. This will be the first step to tax relief related to going back to school, as long as you’re staying with your current job while attending classes, up to $5,250 of the assistance you receive can be completely tax free.
Tax Credits– Tax deductions are key to lessening your financial burden, but before filing taxes check out the tax credits. The American Opportunity Tax Credit might offer more of a tax break, they are for students seeking a four year college degree. You need to be taking more than one class to be eligible for the American Opportunity Tax Credit but the Lifetime Learning Credit allows you to only take one class to be eligible.
School Tuition Deduction- Chances are you can get deducts for costs in tuition, books, and other fees that might apply as an unreimbursed employee expense. Congress might extend the tuition and fee deduction that is worth up to $4,000 in benefits depending on your income. Optional fees that aren’t course requirements or new athletic gear are non-deductibles so it would not be about of the benefits. Congress usually extends this tax break and is set to vote again soon.
Financial Aid– Even after seeking financial aid there is still a way to save money for your trip to college. Up to $2,500 of the interest you repaid on your student loans can be deducted by the federal government every year. Your filing status and income plays a huge role on determining how much of a deduction you can receive.
For returning students, tax deductions and credits are very straightforward however if you are having trouble crunching numbers, Tax Prep Boston can aid you through this process to find the highest tax breaks on your return back to school! Call 877-TAX (829) -7334 to get a free quote from us today!