It’s tax season! There is a terrific amount of information to sift through. Because every student is on a unique educational path, one piece of advice may not be enough to cover your financial and tax needs. If you go online and type in “Publication 970” in the address line, a PDF file should appear that covers 13 sections (You may also go to www.irs.gov and search for “Publication 970). Titles of the chapters in this publication that may apply to you are:
- Scholarships, Fellowships, Grants and Tuition Reductions
- American Opportunity Credit
- Lifetime Learning Credit
- Student Loan Interest Deduction
- Student Loan Cancellation and Repayment Assistance
- Tuition & Fees Deduction
- Coverdell Education Fees and Deduction
- Qualified Tuition Program
- Education Exception to Additional Tax on Early IRA Distributions
- Education Savings Bond Program
- Employer-Provided Educational Assistance
- Business Deduction for Work Related Education
- How to get Tax Help
Three vocabulary words may help you understand some information. They are deduction, credit and nonrefundable credit. A tax deduction reduces the amount of income that is subject to tax. A tax credit reduces the amount of income tax you may have to pay. A nonrefundable credit refers to a credit that can reduce the tax amount you owe to zero, and if the credit is larger than the amount you owe – you will NOT receive the remainder as a refund.
If you have advice or had an experience that your fellow KEF students could benefit from, we would like you to share in our discussions on this blog and any of the blogs on this KEF website.