Education Credits | Robert F. Murray & Co CPAs PC

Feb

Patience will be required this tax season!

Categories: Individuals

Tags: amortization, Business Credits, Depreciation, direct deposit refunds, education credits, IRS refunds, IRS tax forms, passive activities

Comments: No

Written by Mike Harter, CPA/PFS, CFP®

The 13^th hour tax decisions by Congress is impacting taxpayer’s wallets in more ways than a reduction in their take home pay. The IRS now must go back and retool tax forms and software to handle the new rules. This then has to go to the tax software companies and then to tax preparers before any returns can be filed by paid preparers. IRS is not accepting any tax returns prior to January 30^th. Some forms will not be approved until mid-February and into March.

Education credits (Form 8863) will be processed in mid-February. Common forms such as General Business Credits (Form 3800), Depreciation & Amortization (Form 4562) and Passive Activities (Form 8582) also join the February/March list.

In addition, direct deposit refunds which have typically taken 7 to 10 days will now be closer to 21 days as the Service is implementing new procedures in an attempt to stop fraudulent refunds from being processed. Many taxpayers rely on early tax refunds to pay bills.

So, patience will be at a premium this tax filing season! Remember – Don’t kill the messenger!

Mar

Higher Education Tax Benefits

Categories: Individuals, Planning & Strategies

Tags: education credits, education deductions, tuition credits, tuition deductions

Comments: No

Written by: Melinda Long, CPA

There are plenty of times we are asked about which education credit is most beneficial for a client to use. Below is a short list of various credits in the order of the biggest credit to smallest.

American Opportunity Credit – Receive a credit up to $2,500 PER STUDENT per year. Fees to include are tuition and fees, books and supplies.
Lifetime Learning Credit – Credit up to $2,000 PER TAXPAYER per year. Only tuition and fees can be used to calculate this credit.
Tuition and Fees Deduction – Deduction of up to $4,000 per taxpayer. Only tuition and fees can be used to calculate this deduction.
Qualified Scholarship- Amount is excluded from gross income. Tuition, fees, books and supplies are used to calculate this amount.
Qualified Tution Program – Tax-free earnings. Can use the funds from this 529 plan for tuition, fees, books, supplies, room and board.
Coverdell ESA- Tax-free earnings. Can use the funds from this ESA for tutition, fees, books, supplies, room and board.

For adjusted gross income phaseouts and a more indepth explaination of these credits/deductions, visit the Tax Benefits for Education page on the IRS.gov website.

All posts tagged education credits

Patience will be required this tax season!

Higher Education Tax Benefits