More tax breaks this year for students
The only two things guaranteed in life are death and taxes.
For most students, death is well off, though some would welcome it before paying taxes.
As the April 15 tax filing deadline approaches, there are more opportunities for students to receive a bigger refund than in recent years.
“It’s a good year to be in school,” said Nina Cunningham, public relations director of Liberty Tax. “There are more breaks than there were last year.”
The American Opportunity Credit, signed into law by President Barack Obama as part of the American Recovery and Reinvestment Act of 2009, now allows students to claim up to $2,500 of tuition and required course costs for up to four years. Previously, the credit was only available for two years.
<div><span>Need to file?</span>
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Popular options for students:
- Online tax service (TurboTax)
- Go to your parents
- Consult a tax preparer
- DEADLINE: April 15
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Taxpayers also can deduct up to $2,500 of repaid student loan interest, if their income falls below $60,000. If a taxpayer is filing alone, income must fall below $75,000. If two taxpayers are filing jointly, income must be between $120,000 and $150,000.
Ways to file taxes
While some students may want to use an online tax service such as TurboTax, Accounting Instructor James Neurath said that option may not be best for all students.
“Tax situations can be so varied,” Neurath said. “In some situations, (TurboTax) is fine. But a computer doesn’t think for you, it will accept anything you put into it.”
Neurath recommends students have their parents’ tax preparer organize their returns.
“If a student has a simple return, with not a lot of scholarships or endowments and a couple of W-2s, I usually throw that in for nothing,” Neurath said.
Wheeler freshman Alex Kennedy goes to her parents when tax season rolls around.
“My mom has more experience with taxes, so she helps me,” Kennedy said.
Neurath said when it comes to student returns, scholarships usually are the most complicated matter.
“If you get a scholarship for room and board, that’s taxable. If you get a scholarship for tuition, that’s not taxable,” he said. “That’s a situation that could affect some student athletes.”
Also, computers and computer expenses are now deductible under 529 plans, Cunningham said.
A 529 plan is an education savings plan operated by a state or educational institution designed to help families set aside funds for future college costs. It is named after Section 529 of the Internal Revenue Code, which created these types of savings plans in 1996, according to savingforcollege.com.
Neurath said students should seek as much tax help as they can.
“What seems like a simple situation can turn into a complex situation,” he said. “You just never know.”
