Education Tax Benefits

TAX BENEFITS for EDUCATION: IRS Publication #970

If you are saving for or paying higher education expenses for yourself, your spouse, and your dependent, the IRS tax code offers various tax benefits--if you qualify, such as:

1-American Opportunity Tax Credit (for the first 4 years of higher education)

2-Lifetime Learning Tax Credit (for years after college)

3-Student Loan Interest Deduction

4-Tax Free Canceled Student Debt

5-Tuition & Fees Deduction (currenlty extended to cover years 2018, 2019, and 2020)

6-Tax-Free Student Loan Repayment Assistance

7-Coverdell Education Savings Account (possible tax-free earnings)

8-Qualified Tuition Program QTP (possible tax-free earnings)

9-Avoiding 10% penalty tax on early IRA distributions used for education costs

10-Cash in certain savings bonds for education costs without having to pay tax on the interest

11-Tax-Free education assistance from your employer

12-Claim a business deduction forwork-related education.

Remember: Each of  the above has specific requirements you must meet in order to be eligible for the tax benefit.

COMMON TAX REPORTING FORMS/STATEMENTS

Tax Form 1098-T Requirement for Education Tax Credits

You MUST obtain this tax statement from the education instutution to claim the education tax credits (unless the institution isn't required to isse on).

Tax Form 1098-E Requirement for Student Loan Interest Deduction

You MUST obain this tax statement from the education institution to claim the student loan interest deduction

Tax Form 1099-Q for Distributions From Coverdell ESA and Qualified Tuition Program Accounts

For Coverdell Education Accounts and Quailfied Tuition Program distributions, the education institution will isse tax statement 1099-Q

Tax Form 1099-R for IRA Distributions

Form 1099-R will  be issued for distributions from IRA's used for education purposes.

Recordkeeping

You must keep records as proof of any deduction or credit claimed on your tax return.

Remember: The various education benefits each have very specific criteria and requirements you must meet.

IRS Publication #970 provides great detail on each.

CALL NOW 561-746-1926 or 561-339-8102 if you have any questions or concerns or would like to schedule a FREE, Confidential, No-Obligation Tax- Saving Consultation.