Can You Use A Student Tax Credit?
As the school year approaches, college students wonder if they need to report scholarships or tuition on their tax returns. Undergraduate students are at a lower risk of owing money to the IRS. Everyone attending a college, technical college, or university should gather certain records to obtain tax credits. Those receiving grants and scholarships only need to report earnings to the IRS if they receive more than the amount owed. Here are some potential tax credits college students need to list on their tax returns.
Potential Student Tax Credit for College Students
- Grants
- Loans
- Tuition Payments
- Scholarships
- Housing bills
- Textbook costs
- Materials purchased for college (for example, laptops, calculators, and cell phones)
- Fellowship payments
List of Credits for College Students
Reporting your school payments or loans could lessen your taxable income. Save your school bills and keep an eye out for your 1098-E. Listing payments could lead to a reduction of money owed. Here is a list of the tax credits college students can file on their tax returns.
- American opportunity tax credits pay up to $2500 to students for the first four years of qualified education.
- Lifetime Learning Credits are awarded to undergraduates, graduates, and professional degree courses.
- Student loan interest credits are for those who paid interest on a student loan and are unmarried or filing separately.
Proper Filing Procedure
Before filing your payment and tax information to the IRS, ensure you meet the following requirements.
The educational institution you attended is eligible. See if your school qualifies here Federal School Code Lists | Library | Knowledge Center
You cannot have finished the four years of your graduate or undergraduate education before the beginning of the tax year to file those taxes.
You cannot have claimed the AOTC or Hope Credit for more than the last four years to receive the AOTC and LLC.
You can log into this interactive tax assistant to see if you qualify for these tax credits.
Interactive Tax Assistant
To see if you qualify for a student loan credit, provide the following:
- filing status
- enrollment status
- gross income
- name of payer
- date of paid expenses
- the academic period
- Were payments made with tax-exempt funds?
- Were expenses paid with distributions from a Coverdell Education Savings Account or Qualified Tuition Program?
Gathering all your financial information before you meet with a tax expert will ensure they allow you all eligible tax credits. For more information concerning your student tax credits and all other credits, visit irs.gov. If you are a college student graduate, don’t panic! Call Joe Franek for more tax credit information.
Sources-
Beneficial Education Credits for Student Expenses And Education Tax Deductions. Tax Credits for College Students. (efile.com)
Am I Eligible to Claim an Education Credit? | Internal Revenue Service (irs.gov)
Federal School Code Lists | Library | Knowledge Center