Back to School Expenses, Taxes, and your Wallet.

Copping with School Expenses:

Back to School is just around the corner and with that $$$ ...for tuition, books, and supplies.   The good news is that they are some tax benefits that can help offset students costs.

Who qualify?

Typically, these benefits apply to you, your spouse or a dependent for whom you claim an exemption on your tax return.

Under which IRS Regulations?

American Opportunity Credit- The credit can be up to $2,500 per eligible student and is available for the first four years of post secondary education. Forty percent of this credit is refundable.  It covers, tuition and fees, course related books, supplies and equipment. Generally available to eligible taxpayers whose modified adjusted gross income is below $80,000 ($160,000 for married couples filing a joint return).

Lifetime Learning Credit In 2011-  A credit of up to $2,000 for qualified education expenses. There is no limit on the number of years you can claim the Lifetime Learning Credit for an eligible student.  To qualify, your modified adjusted gross income must be below $60,000 ($120,000 if married filing jointly).

Some of the Terminology you should know: 

What constitute "Tuition and Fees Deduction?"

What is consider "Qualified Education expenses"

How you calculate your "Modified Adjusted Gross Income"?

Who is considered an "Elegible Student?"

How much you are allowed to include?

Source: IRS.gov

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