Uncategorized Going Back to School After 40: Know The Tax Benefits Leer el artículo Abrir el cajón compartido Escrito por Elle Martinez Publicado Ago 11, 2023 2 minutos de lectura Going back to school, whether to start a degree, finish up one from years ago, or pursue an advanced degree can be both rewarding and stressful. Working on papers, handling work assignments, and/or taking care of family can be a lot to handle. The good news is that you can lighten your financial load by making sure you claim all the tax benefits you’re entitled to. Educational Tax Deductions and Credits While they are somewhat related, tax credit and deductions are different. Tax deductions reduce your taxable income while tax credits lower your tax bill. In addition, some tax credits are refundable meaning you can not only reduce your bill to zero, but get some money back. With school, some of the biggest tax deductions and credits include: American Opportunity Tax Credit (AOTC) This is a refundable tax credit for eligible educational expenses during your first four years for up to $2,500 per student. If you’ve already completed four years’ worth of college work, then you don’t qualify for this credit. You may qualify if your modified adjusted gross income is up to $90,000, or up to $180,000 for married couples filing jointly. Lifetime Learning Credit This tax credit can help with tuition and related expenses for up to $2,000 per tax return, provided you’re enrolled at an eligible educational institution. There is no limit to the years you can claim this credit. You may qualify if your modified adjusted gross income is up to $65,000 or up to $130,000 if you are married and filing jointly. To see if your school is considered eligible, you can check out the FAFSA site and see if it has a Federal School code. More Educational Tax Benefits If you don’t qualify for either credit, you may still be able to take the Tuition and Fees Deduction. Have student loans? Make sure you deducting the interest on them. You may be able to deduct up to $2,500 of student loan interest paid. Of course you’ll do your finances a favor if you can minimize the student loans you take out. You should also talk with your financial aid office to make sure you’re applying for relevant scholarships and grants. Student Discounts and Other Bonuses Besides taxes, make sure you’re taking advantage of your student status and get those discounts! You may be able to snag better deals on tickets to music venues, museums, and movies if you’re a student. The next time you’re out, proudly show your ID. Every little bit helps and the money you save can be redirected towards other goals, like contributing more for retirement. Thoughts on Going Back to School I’d love to hear from you about your educational plans. How many of you are going to or coming back to school? What motivated you to start or a finish a degree? Publicación anterior Real Talk Series: Do My Cancer Treatments Affect My Taxes? Siguente publicación NYC Uber Riders Can Now Use Pre-Tax Dollars to Pay… Escrito por Elle Martinez Elle helps families at Couple Money achieve financial freedom by sharing tips for reducing debt, increase income, and building net worth. Learn how to live on one income and have fun with the second. Más de Elle Martinez Visita el sitio web de Elle Martinez. Síguenos en Facebook. Síguenos en Twitter. Los comentarios están cerrados. Buscar artículos relacionados Planificación de Impuestos ¿Qué es una cuenta HSA? Planificación de Impuestos 5 maneras de aumentar tu reembolso de impuestos del añ… Planificación de Impuestos ¿Debería enmendar mi declaración de impuestos por un… Vida Cómo solicitar una extensión: Guía paso a paso Ingreso Instrucciones para el Anexo (K-1): Cómo presentar en 1… Planificación de Impuestos ¡Aún puedes presentar tus impuestos con TurboTax! Trabajo Cómo presentar los impuestos de pequeñas empresas Vida ¿Qué es una exención personal? ¿Deberías usarla? Ingreso Edad para hacer retiros de una cuenta IRA Vida Pago de impuestos en exceso: todo lo que debes saber