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Greetings!
Offsetting
College Expenses
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The
IRS has published facts about the tax deduction for tuition and fees that is available to help parents and students
pay for post-secondary education. If you're facing college expenses
this fall, here's what the IRS wants you to
know.
* The deduction is up to $4,000 for single filers with adjusted
gross income (AGI) of $65,000 or less and joint filers with an AGI
of $130,000 or less. If income exceeds these amounts, the
deduction drops to a maximum of $2,000 for an AGI up to $80,000 for single
filers and $160,000 for joint filers. No deduction is allowed over
these income thresholds.
* The deduction is "above the line," so you don't
have to itemize to benefit.
* You can't take the deduction if your filing status is married
filing separately.
* You can't take the deduction if you are claimed, or can be
claimed, as a dependent on someone else's tax return.
* You can't claim the deduction if you or anyone else claims the
American Opportunity or lifetime learning credit for the same
student in the same year.
* The deduction can't be based on expenses paid with tax-free
scholarship, fellowship, grant, or education savings account
funds, tax-free savings bond interest, or employer-provided
education assistance. This also applies to expenses paid with a
tax-exempt distribution from a qualified tuition plan,
except for expenses paid with the portion of the
distribution that is a return of your contribution to the plan.
There are other tax breaks for college expenses, all with requirements
and restrictions of their own. As you can see, the rules make planning
necessary if you want to maximize your tax benefit for college costs.
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For
help in identifying and utilizing the deductions and credits most
beneficial in your situation, or for more information or
assistance with any tax concern, please call (916) 788-7278.
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