Tax Problems Resolution
– With school back in
session, parents and students should look into tax credits that can help with
the cost of higher education. They do this by reducing the amount of tax
someone owes on their tax return. If the credit reduces tax to less than zero,
the taxpayer may get a refund.
Taxpayers who pay for
higher education in 2019 can see these tax savings when they file their tax
returns next year. If taxpayers, their spouses or their dependents take
post-high school coursework, they may be eligible for a tax benefit.
There are two credits
available to help taxpayers offset the costs of higher education. The American opportunity tax
credit and the lifetime learning credit may
reduce the amount of income tax owed. Taxpayers use Form 8863, Education Credits,
to claim the credits.
To be eligible to claim
the American opportunity tax credit, or the lifetime learning credit, a
taxpayer or a dependent must have received a Form 1098-T from an eligible
educational institution.
The American
opportunity tax credit is:
· Worth a maximum benefit up to $2,500 per
eligible student.
· Only for the first four years at an eligible
college or vocational school.
· For students pursuing a degree or other
recognized education credential.
· Partially refundable. This means if the credit
brings the amount of tax owed to zero, 40 percent of any remaining amount of
the credit, up to $1,000, is refundable.
The lifetime learning credit is:
· Worth a maximum benefit up to $2,000 per tax
return, per year, no matter how many students qualify.
· Available for all years of post secondary education
and for courses to acquire or improve job skills.
· Available for an unlimited number of tax
years.
More information:
Questions?
Give us a call. We're happy to help! For consultation contact us today!
Amare Berhie, Senior Accountant
CFO Services http://youtu.be/EYJdQtbPZAI
(651) 300-4777
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