College Tax exempt?

Question

I live in North Carolina and have a few questions about filing taxes for 2007.

1) I know you can't claim exempt on the purchase price of textbooks, but can you claim the shipping and handling to receive and return the books?

2) I have a $2500 scholarship--do I have to claim that?

3) Can I claim daycare costs if it is a drop-in care for my taxes because of school?

4) I have already recieved the Hope Credit that you can only get once, but is there any other tax break offered?

5) I receive GI benefits---are these tax deductable and will I get some form in the mail for tax time for this?

6) I had to purchase a computer in June of 2006 for my online courses which I started classes in April of 2007--- can I claim the computer under school exspenses for 2007? If I can, where can I find information on that to show my tax person?

I think these are all the questions... I am a full-time student and do online courses. Thank you.

Answer 1

The books, and the shipping and handling to receive them, are not deductible. Neither is the computer, unless you were required to buy that particular computer FROM THE SCHOOL as a requirement of registering for the class - basically, unless the computer purchase was included as part of the tuition, and you had no choice about it, you can't deduct it. The fact that you need a computer to take online courses does not make it tax-deductible.

The Hope Credit is available for two years if you are still in your first two years of post-secondary education. After that, you can take the Lifetime Learning Credit for your tuition and fees - it might work out less than the Hope Credit but will still be substantial.

If your scholarship is used for reduction of tuition and fees, it wouldn't be taxable. But you can't claim an education credit for the amounts of the tuition and fees that are covered by the scholarship.

You might be able to claim the dependent care credit, but if ALL of your courses are online, might have a hard time justifying that the daycare was necessary for you to attend school. Unless you are married, and your spouse has earned income, being a student would not make you eligible for dependent care credit..

Answer 2

well you have a lot to be answered and more questions to be asked .. but i will try
1) no you can not take S&H charges for books
2) as long as you use the scholarship for tuition and books etc no you dont have to claim it... but if you dont use it then yes its part of income
3) yes your can claim daycare expenses if you are going to school... there is an area on that form for a credit of 250 a month while in school to put on the form so it shows income to be able to claim credit
4) yes the hope credit can only be used for the first 2 years of school but there is the tuition credit or lifetime learning credit where u can still use tuition fees that are not covered by scholarship and GI benefits
5) GI benefits are not deductable because the government is paying it not you ... unless you had put money in and then a form will be sent to you to show your tax person
6) Not able to use computer as deduction... goverment feels u also use it for personal use... no deductions...
Now all of this is assuming you are not under 24 and someone else can claim you ... there is always variable's to the federal tax laws... you will have to check with state laws to see if they are the same or not... I am not familier with all state laws.. hope this helped

Answer 3

1. Textbooks are only deductible if the school requires that you purchase them only from the school, however that practice is illegal in most states. If the books aren't deductible, neither is the shipping charge.

2. No, scholarships are not included in income as long as you use it for educational expenses such as tuition, fees, books, room & board, etc.

3. You are only eligible for the Child & Dependent Care Credit if you must pay child care expenses in order to work or look for work. There are no childcare deductions or credits for expenses incurred so that you can go to school. If you also have a job and put your child in daycare so that you can work the fees related to the daycare while you are working are eligible for the credit. See IRS Pub 503 for further information. Here's a link: http://www.irs.gov/pub/irs-pdf/p503.pdf

4. You can claim the Hope Credit for the first 2 years of your education. If you only claimed it for the first year you can claim it for the 2nd year. You can use the Lifetime Learning Credit for any and all years of your education. Alternatively you can use the Tuition & Fees Deduction. You can figure your taxes both ways and take whichever one is more beneficial to you. See IRS Pub 970 for further information. Here's a link: http://www.irs.gov/pub/irs-pdf/p970.pdf

5. GI benefits are monies that you receive. They are not deductible. Nothing that you receive can be deducted. GI Bill benefits are not taxable, however.

6. A computer is only deductible if it is mandatory for the course of study (not merely because it's an on-line course) and you are required to purchase the computer from the school. Again, like textbooks, that practice is illegal in most if not all states.