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VITA for Education

Not many people consider filing their income taxes as a way of paying for college but there are several ways completing this task can do just that. As college expenses continue to rise, it is a good idea for families to become familiar with all the ways to reduce the costs to help make college as affordable as possible. No matter your age, affordable learning opportunities are available for you and your.

Student Tax Incentives: If you are paying for college.

The federal government provides several tax deductions and credits for college students and their parents, making paying for college a little easier. There are several tax deductions and credit that exist to reduce your education costs.

  •  American Opportunity Tax Credit: This is a refundable credit for the traditional degree tract seeking college student. This credit can reimburse you for qualifying education expenses, including tuition and fees, books and supplies. This is a refundable credit up to $2,500, and allows you to claim up to four years of postsecondary education.  Bring in Form 1098-T and/or list of educational expenses.
  •  Lifetime Learning Tax Credits: Many people take classes well after their degree tract for personal interest. This tax credit is available to students, no matter their degree status. This is a federal tax credit of up to $2,000 and is available for all years of post-secondary education.  There is no limit on the number of years that you can claim this credit. Bring Form1098-T and/or list of educational expenses.
  •  The Tuition and Fees Deduction: Like the American Opportunity Tax Credit, this deduction is used to cover all education expenses, including tuition and fees at an eligible postsecondary institution. You are not allowed to claim both a credit and the deduction, so ask your tax preparer which route is more beneficial to you. This deduction can reduce your taxable income by $4000. Bring in Form 1098-T.
  •  The Student Loan Interest Deduction: With an increasing number of students graduating with significant amounts of debt, it can be very beneficial for a taxpayer to take advantage of the Student Loan Interest Deduction. Taxpayers can deduct up to $2500 of the interest paid on qualifying student loans. This amount is subtracted from the amount of income that the taxpayer is reporting. Bring in Form 1098-E.

Taxpayers who have paid qualified educational expenses of higher education for an eligible student in 2012 can claim either the American Opportunity Credit or the Lifetime Learning Credit.Be sure to ask your tax preparer for the guidelines for claiming the education credits and deductions.

Student Financial Aid: If you need help paying for college.

The Federal government is the largest provider of financial aid for college expenses.  In order to determine how much your student/family qualifies for, your income tax information is used to complete the FAFSA – Free Application for Federal Student Aid. Filing your taxes is the first step in making sure that you get as much financial aid as possible. Click here to fill out your FAFSA online.

Who Qualifies for Aid: Federal Student Aid, an Office of the Department of Education, guide to eligibility requirements for student aid.

FAFSA Overview: Federal Student Aid, an Office of the Department of Education, overview of the FAFSA (Free Application for Federal Student Aid).

Free Application for Federal Student Aid (FAFSA): Federal Student Aid, an Office of the Department of Education, Free Application for Federal Student Aid.

College Goal Montana: The Student Assistance Foundation’s site provides students and families with resources and tools to pursue and fund their postsecondary education.

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