Please ans my questions.
=If we pay college tution from our savings,do we get tax benefit for it?
=If we get a personal loan,do we get tax returns for the amt paid in the intrest?
=Where can i get more information about things to keep in mind before filing tax, if i plan to take loans and start college this yr.
2007-03-28 06:33:11 · 4 answers · asked by drdu 1 in Business & Finance ➔ Taxes ➔ United States
See IRS Publication 970, tax benefits for education - download at http://www.irs.gov/pub/irs-pdf/p970.pdf
If you pay from your savings, you won't get a deduction for student loan interest since you won't have any. Student loan interest csn be deductible.
you will probably be eligible for Hope and Lifetime Learning credits for tuition and fees while you're in school, or for the tuition and fees deduction if that continues to be renewed.
2007-03-28 08:02:26 · answer #1 · answered by Judy 7 · 1⤊ 0⤋
If you pay college tuition out of your own pocket you do get a tax credit for it. There is a seperate form that you need to fill out for it. You may qualify for the life time learning credit. Check it out at http://www.irs.gov/faqs/faq-kw104.html the form you need to complete is a form 8863 if you do not qualify for the Life time learning credit thenyou qualify for the Hope credit most likely.
You do get a return amt for the amt paid in interest on loans also.
Can't answer your third question ,but if you are having trouble filing your taxes try going to www.taxact.com this is where I do my taxes every year. You will have to register an account, but it is completely free, unless you want to e-file then you must pay the e-filing fee which isn't that much. If you are military thenyou don't have to pay that even. The only annoying thing is you will have to click skip or next on a few (not a lot) of ads they have that pop up from time to time while doing your return. They make it easy because they ask you questions that you can understand (i.e. what amount if any is in block 12 of your W-2) and by answering these questions it fills in your return for you.
2007-03-28 06:46:15 · answer #2 · answered by GreatWhiteHype1 1 · 1⤊ 0⤋
1. Yes
2. No, personal loans are never deductible. Student loans may be eligible for interest deduction.
3. Start with IRS Pub 17. Get it from the IRS website.
2007-03-28 06:48:51 · answer #3 · answered by Bostonian In MO 7 · 2⤊ 0⤋
If you pay for your college education with your savings, there is no tax benefit for you. However, if you take out a loan, then you may be eligible to deduct the interest paid on the loan from your taxes. You should look at the IRS website for more information regarding tuition deductions or education credits. Depending on your household AGI, you may be eligible for one of the two different tax credits, either the Hope credit or the Lifetime Learning credit, either of which can save you quite a bit on your taxes.
You should also fill out the FAFSA, to find out how much aid you are eligible for, and if necessary, qualify for student loans.
Hope that helps!
2007-03-28 06:43:09 · answer #4 · answered by park_brit 2 · 0⤊ 4⤋
Best thing for you to do is go to the following site:
http://www.irs.gov
Download Publication 17, go to Chapter 35 and it tells you more about claiming Education Credits.
2007-03-28 08:35:18 · answer #5 · answered by Shayne 1 · 0⤊ 0⤋