|
The 2013 version of Tax Breaks for Higher Education (http://urbanext.illinois.edu/taxbreaks)
contains practical information about how parents and students can
lower their income taxes.
"Each tax break is unique," said Karen Chan, U of I Extension
educator and author of the website. "There are different eligibility
criteria, definitions of qualifying expenses and types of education
programs that are covered. This website provides the details people
need to figure it all out," she said.
Chan said the "Highlights" section on the website is a good place
to start to learn the general features and requirements for eight
permanent federal tax breaks. The information is organized in
stages: saving for postsecondary education, paying for expenses and
paying off debt.
"For those who are planning ahead and saving for future expenses,
people should check out the Coverdell Education Savings Account;
qualified tuition programs, commonly known as 529 plans; and the
savings bond interest deduction," Chan said.
Parents and students who are currently paying for higher
education expenses may be eligible for an American opportunity
credit, previously called the Hope Scholarship credit; the lifetime
learning credit; employer-provided assistance; or penalty-free early
distributions from IRAs.
[to top of second column] |
"Most of today's graduates leave school with sizable student
loans," Chan said. "The interest payments on those loans may qualify
them for the student loan interest deduction."
Sweedler explained that some tax breaks can be used for many
types of higher education classes, whereas others can only be used
to pursue a degree. To qualify for many tax breaks, your income must
be below certain limits, some of which change each year. Those kinds
of details are spelled out in the section titled "Eligibility and
Limitations."
"If you're worried about the tax records you'll need and how to
claim the tax breaks, the new section addressing ‘Tax Forms and
Reporting' will guide you," Chan said. "It lists the types of
statements you should receive and tells you exactly where to report
or claim a tax break."
[Text from file received from the
University of Illinois College of Agricultural, Consumer and
Environmental Sciences] |
