Four Tax Breaks Every College Student Should Know About

Four Tax Breaks Every College Student Should Know About
World
Like Us On Facebook
Like Us On Facebook

While student debt may be an inevitability for many, there are many things college students can do to alleviate this debt.

According to the New York Federal Reserve, Americans ended the third quarter of 2012 with a $74 billion lighter debt load overall, but consumers upped their non-mortgage credit debt by another $2 billion and took on $42 billion in new student loans.

With the majority of the new debt coming from student loans, college students should know their options as far as tax breaks go, especially heading into tax season.

The U.S. Government Accountability Office found that Americans left nearly $800 million worth of college tuition tax benefits in 2009 on the table.

Here are some of the best tax credits college students can take advantage of:

American Opportunity Credit. Students are eligible to claim up to $2,500 for the first four years of post-secondary education. With 40 percent of the credit being refundable, students can get back up to $1,000 on their refund –– even if they don’t owe any taxes, according to the IRS.

What qualifies: Tuition and fees, course related books, supplies and equipment. Income: Couples filing jointly who earn less than $160,000; single-filers who earn less than $80,000.

Lifetime Learning Credit. For students earning less than $60,000 (single-filers) or $120,000 (married, filing jointly), they can claim up to $2,000 education-related expenses.

Tuition and fees deductions. Like the American Opportunity Credit, students earning less than $80,000 (single) or $160,000 (married, filing jointly) can deduct up to $4,000 in tuition and fees on their annual tax returns. Use it while you can –– this tax break is set to expire at the end of 2013, unless lawmakers extend it.

Student loan interest deduction. If you’ve taken out a federal or private student loan, you’re eligible to deduct up to $2,500 worth of interest paid on the loan as an “above-the-line” exclusion from your income. You don’t have to itemize your deductions in order to claim it.

Note: College students can only claim one of the above tax credits per year, but parents supporting more than one child in college can claim tax credits on a per-student basis.

James Gilbert | Elite.

Share Tweet
React
Like Us On Facebook
Like Us On Facebook

James Gilbert

World news writer James Gilbert is one of the oldest on the Elite Daily writing staff, as he is a borderline Gen Y member. Being considered the dinosaur of the group, he is constantly asked about historical time periods he did not actually live through. All and all, James Gilbert brings that dynamic and balance to the team, rounding out Elite Daily’s Voltron (or that thing the Power Rangers formed for you young whippersnappers.)

More In World

World Sean Levinson

So Much Yes: Drinking Beer Might Actually Be Good For Your Brain

A natural compound found in red wine, chocolate and, most importantly, beer, has been found to strengthen the brain. CNN reports that a team of researchers tested the flavonoid xanthohumol on both young and old mice by seeing how they performed in a maze. The first group was able to better navigate the maze’s obstacles […]

World Emily Arata

Scientists Are Getting Closer To Creating The Invisibility Cloak From ‘Harry Potter’ (Video)

University of Rochester scientists are working to make the world a little more magical with the help of advancements in cloaking technology. Just as Harry Potter sported his invisibility cloak, researchers are working to cloak visible objects. Using special lenses, the scientists are able hide hands, furniture and anything else that stays still long enough. […]

Also On Elite

Videos

11-Year-Old Girl Absolutely Kills Dance To Nicki Minaj’s ‘Anaconda’ (Video)

This girl has skills. Dancing skills, that is. Her name is Taylor Hatala and she’s 11 years old. In this video, she absolutely kills it dancing to Nicki Minaj’s “Anaconda.”  The dance was choreographed by Laurence Kaiwai, and it’s pretty damn impressive. Nicki should hire this girl to be in her next video because she could […]

Life

How 9/11 Broke The Post-90s Dream Gen-Y Was Living In

I was 9 years old and beginning fourth grade when two planes crashed into the World Trade Center. I remember the day began for me just as any other normal day. I watched “Catdog” with my breakfast, made sure I had all my homework done and also reminded myself to bring my books for piano […]

Sports

5 Reasons The NHL Should Look Toward Expansion

As the calendar turns to September, and a chill enters the night air, sports fans begin their thoughts of the winter leagues. In arenas across America, management is starting to put down ice for the start of hockey season. In the National Hockey League, 30 teams are starting training camp and working to raise the Stanley […]