Back to School Tax Tips
As children (and adults, too!) head back to school, we'd like to remind you of a few ways you can minimize your income taxes:
Most before and after school care can be deducted. For a child under the age of 13, the cost of before and/or after school care may qualify for a tax credit. This includes the child care component costs of private school tuition. School uniforms are not deductible even though they are required. Donating outgrown uniforms to charity can be deductible if you itemize.
School fundraiser tickets may be fully or partially deductible. Check your raffle tickets for the amount deductible.
Earnings in 529 Plans are not federally taxable. Use the money you've saved into a 529 Plan to pay for eligible college expenses as well as books and computers for elementary, high school and college students.
Student loan interest is deductible. Student loan interest paid up to $2,500 is usually deductible. You do not have to itemize deductions on Schedule A in order to claim this valuable deduction.
The American Opportunity Tax Credit can amount to $2,500 in tax credits per eligible student and is available for the first four years of post-secondary education at a qualified educational institution.
The Lifetime Learning Credit can amount to up to $2,000 credit for qualified education expenses paid for a student enrolled in an eligible educational institution.
The Tuition and Fees Deduction applies to qualified education expenses for higher education for an eligible student taking undergraduate, graduate or post graduate courses.
As always with tax law, there are exceptions and exemptions. consult with your tax preparer if you need mor information or have any questions.
Guest blogger Amy Sigurdson contributed this article. Amy is a Tax Associate at Gilmore Jasion Mahler, LTD (GJM). Learn more about GJM's expertise in Tax.
