Tax Benefits for Students
Tax benefits change year to year but there are always some deductions for students and their parents. We are not income tax experts, please check with your tax professional before filing. This article is intended as a guideline only.
Some examples of tax benefits available for the 2006 tax year -
Hope Scholarship - This is actually a tax credit, not a scholarship. The credit is subtracted from the amount of tax you actually owe, not your income. You cannot get a refund of this credit, it can only be deducted from the amount you owe. The amount of the credit depends on several factors such as income, cost of tuition and fees, and the amount of certain scholarships received. To receive this credit you need a form 1098-T from the school which is used to fill out IRS form 8863. Your 1098-T form should include contact information for someone at your school who can help you with questions or filling out the form. You can only claim this credit for two years of schooling.
Lifetime Learning Tax Credit - This is also a credit, deducted from the amount of taxes you owe as opposed to a refund. The credit is run pretty much the same as the Hope Scholarship, it uses the same 1098-T and IRS form 8863. The only difference is it is not limited to 2 years.
The Tuition and Fees Tax Deduction - This is an income deduction that you can use even if you do not itemize. You may deduct up to $4000.00 of tuition and fees, no other expenses are eligible. These must be fees you actually paid, no tuition or fees paid by tax-free scholarships, grants or any other assistance are eligible. There was a last minute extension by congress to allow this deduction this year so it is not properly printed on the tax forms. People claiming this deduction are encouraged to e-file because it has been added to the IRS software, otherwise you must follow special instructions to make sure the form is filled out properly. You will need a form 1098-T from your school and a 1040 tax form.
Interest deduction - You can deduct up to $2500.00 of interest paid on student loans, provided it is not deducted somewhere else on your return.
Remember these benefits and amounts change year to year so make sure you have current information when filing your taxes!
Related Tags: interest rates, taxes, financial aid, deductions, student loan consolidation, federal loans, tax benefits, student benefits, student taxes
Federal Education Services is a company that specializes in federal student loan consolidation, Stafford loan origination, PLUS and Graduate PLUS loan origination and as a resource for students with questions regarding educational financing. For any questions regarding this article please contact Federal Education Services. A friendly loan specialist can be reached at (877) 222-4727 or you can find us on the web at www.feded.net.
Your Article Search Directory : Find in ArticlesRecent articles in this category:
- Be Competitive With Computer Program
Do you speak the language of programming? No, I'm not kidding. Computer programmers and analysts hav - Make Green Living Your Career As An Environmental Protection Technician
The focus on green living is shifting from just reuse, reduce, recycle to the use of solar energy, e - The Whole Truth About Sat Tutoring
Preparing for the SAT examination can be a trying experience. It requires months of dedication, pers - Art And Design Foundation Studies Prepare You For A Creative Career
A career in the creative field of visual arts takes talent, skill and a strong foundation. There are - Specialization In Finance Is Most Desired Amongst Mba Students!
Specialization in MBA-finance is perhaps the most desired and sought after finance courses in India. - Online Degrees: The Different Method Of Education
Education is amongst the most vital things which an individual can have. It's very important in the - Why Online Education Is So Excellent
We're so accustomed to seeing college students go to school and obtaining their education the conven - Hr Degrees That Fit Your Career Goals
Figuring out which HR degree is right for you begins with clarifying your career goals within the fi - What Are Apprenticeships And What Are The Benefits?
By definition, Apprenticeships are a new generation of training which combines the study of a specif - Let Us Browse Through Some Of The Top Science Colleges In India
With an immense supply of talents, India is fast emerging as a perfect destination to locate high sk
Most viewed articles in this category:
- Tips For Getting Scholarships
College isn't cheap. It's a serious investment that can have a wonderful return. If you are concerne - Accenting Higher Education for Young Minds
There are so many universities in the UK, USA, Scotland and Australia. Approximately 4.8 million stu - 4 Sure Fire Ways To Immediately Boost Your Success In The Mba Group Discussion/ Personal Interview
Having cleared the written test for B- Schools such as IIM's, XLRI, IIFT, FMS- Delhi, it is importan - 3 Surefire Methods for Arts Graduate to Succeed in the MBA Group Discussion and Personal Interview
Being an Arts Graduate, you should do away with the notion that you would not be Good enough in the - Ways To Pay For Your Master Degree - That You May Not Have Thought Of Yet
Paying for any college education, including earning your master degree can be expensive. It is a maj - Importance of Career Planning
Career means profession, which we want to adopt for earning livelihood, and planning means proper fl - Key Factors to Consider With Bad Credit Student Loans
Education is important today, particularly for those who are less fortunate in life. It's their tick - Teacher's Training
In an attempt to boost student achievement, a public-school district teamed with a university to put - Acing the SAT Essay Test Even If You're a Bad Writer: A Step by Step Guide Part I
As if the multiple choice questions weren't enough, the New SAT requires test takers to provide a sa - College Scholarship Program Application Process
The necessary process to apply for a college program scholarship is not different from applying for