I read somewhere that being a student can be a deduction, or something like that. How can that help me financially, and what tax form do I use for that, and what do I do?
I hope someone can understand what I'm trying to say. lol
2007-04-13 11:19:48 · 5 answers · asked by Tony 6 in Business & Finance ➔ Taxes ➔ United States
Being a student can be helpful, but it depends if you are a dependent or not. If your parents are claiming you as dependent, they may be able to get tax benefits (Hope, Lifetime learning, student Interest deduction), but you will not be able to get anything.
However, if you are not a dependent, you are able to deduct any interest (up to $2500) that you paid toward student loans. If you are a current student, your loans are deferred and you may not have paid any of the interest that was accruing on your unsubsidized loans. Also, if your parents or anyone else made payments towards interest on your loans, you can take a deduction for it (the IRS looks at is as though they gave you the money and then you paid it).
In terms of other tax breaks, the Hope Credit and Lifetime Learning Credit also might be available to you as long as you are not a dependent. Basically the Hope credit is available in your first two years of undergraduate education and is worth up to $1650 per student (100% of the first $1100 spent on education and 50% of the next $1100). The Lifetime Learning Credit is good any time during school and is worth up to $2000 per tax return (20% of college expenses for the first $10,000 of expenses).
The student loan interest is a deduction, which means that if you earned $5000 this year, but paid $500 in interest, the income you are taxed on is only $4500.
The Hope and Lifetime Learning are Tax credits. This means that if you fill out your tax forms and owe $3000 in taxes, if you had a Lifetime Learning Credit for the full amount of $2000, that is credited towards you tax bill, and you only owe $1000.
2007-04-14 08:01:02 · answer #1 · answered by Anonymous · 0⤊ 0⤋
you can deduct the taxes spent on school loans and you can take a credit for any school loans you got out to pay for school.
Freshmen and Sophomore year only for Hope Credit. This only applies if you took out loans for yourself. If your parents did this, then they can get the credit.
Anything beyond that, I'm not sure about.
2007-04-13 11:26:47 · answer #2 · answered by Purple 4 · 0⤊ 0⤋
You can take the Hope credit or Lifetime learning credit for your tuition expense and deduct student interest exp as well.
2007-04-13 12:09:50 · answer #3 · answered by LC 2 · 0⤊ 0⤋
Just being a student doesn't help with taxes.
Maybe you're talking about education credits. If you, your school, and your expenses are eligible, that can reduce your taxes. See IRS Publication 980 and/or form 8863 and its instructions.
2007-04-13 11:25:15 · answer #4 · answered by Judy 7 · 0⤊ 0⤋
simple the folke use you as adeduction even if your in adorm so there that they get more back then you go online to irs and then do the free tax prep online and take the questions as you go you can fill out and get back any money you put into scool and also the parents get that back too so if you didnt make 52,000.00 this year go online and do them for free
2007-04-13 11:29:02 · answer #5 · answered by Anonymous · 0⤊ 1⤋