The federal tax return filing deadline is only a month away. Don’t forget to claim the tax benefits of college, says Sallie Mae, the nation’s No. 1 financial services company specializing in education. Taxpayers who paid college tuition or interest on student loans in 2013 may be eligible for a tax break.
A national study conducted by Sallie Mae and Ipsos found that 41 percent of parents of college students and college students filed education tax credits or student loan interest tax deductions.
“It is worth it to learn what tax breaks for education expenses are available and how you can qualify,” said Nikki Lavoie, spokeswoman for Sallie Mae. “Filing for education tax credits and student interest tax deductions is one way to make college more affordable.”
Sallie Mae recommends taxpayers in college, taking a course, or paying interest on a student loan investigate whether they are eligible to claim one of the following credits or deductions:The American Opportunity Tax Credit is a per-student, partially refundable tax credit. It was set to expire at the end of 2012, but it was extended through 2017. For tax year 2013, students can claim a tax credit of up to $2,500 for expenses on tuition, fees and educational materials in the first four years of post-secondary education. To receive the maximum credit amount, a taxpayer must have modified adjusted gross income of less than $80,000, or $160,000 for joint filers. Again this year, low-income families who owe no tax may be eligible to receive a credit refund of up to $1,000 for each qualifying student. The Lifetime Learning Credit is a per-taxpayer, non-refundable credit of up to $2,000 that applies only to expenses for tuition and fees. Students in undergraduate or graduate programs or any continuing education program may be eligible. The credit may be claimed for any year in which qualified tuition and fees are paid. To receive the maximum credit amount, a taxpayer must have modified adjusted gross income in 2013 of less than $53,000 and $107,000 for joint filers. The Student Loan Interest Deduction is an “above-the-line” deduction of up to $2,500 for interest paid on qualified federal or private higher education loans. To receive the maximum deduction, joint filers must have modified adjusted gross income of less than $125,000 and $60,000 for single taxpayers. Refer to the IRS Form 1098-E to determine the amount of student loan interest paid on one or more qualified higher education loans during the year. Sallie Mae customers may log in to SallieMae.com to securely download their Form 1098-E from their online account. The Tuition and Fees Deduction is an “above-the-line” deduction of up to $4,000 for qualified tuition expenses and related fees paid in 2013. In order to receive the maximum deduction, a taxpayer must have modified adjusted gross income of less than $65,000 or $130,000 for joint filers. Taxpayers may refer to the IRS Form 1098-T provided by their school to help them determine the amount of qualified tuition and related fees they paid during the year. Taxpayers can even save money for college as they file. Members of Upromise by Sallie Mae, a free-to-join program that helps students and families save money for education expenses, can earn 10 percent cash back on all TurboTax software and service charges incurred in conjunction with the preparation and filing their taxes. They should first log into their account on Upromise.com, and then using the dedicated TurboTax link. New this year, TurboTax Online will feature a banner to let users know they have options for repaying federal student loans. The banner will link to the U.S. Department of Education, where users will be able to determine if they could lower their monthly student loan payments through an income-driven repayment plan.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV