Student Tax Refund
Are you a student? If so you may qualify for additional tax credits. However, there are a few things you need to know when filing your tax return.
The American Opportunity Credit
This credit modifies the Hope Credit that was available for taxpayers in 2008. The American Opportunity Credit was not available prior to 2009. This credit is available to students with a modified adjusted gross income of $80,000 or married filing jointly with a modified AGI of $160,000. The maximum annual credit is $2,500.00 per student, which is a $700.00 increase.
This credit can be used for tuition and certain fees, which include course materials. The course materials can include books, supplies and equipment needed for your class. Also the American Opportunity Credit has expanded to the first four years of a post-secondary education, instead of the first two years as previously in the Hope Credit.
Your credit will reduce your tax liability by a dollar for each dollar you qualify for. The credit is calculated by allowing you to claim a maximum of $2,000 for tuition, all permissible course material expenses, and 25% of the next $2,000 you have paid as long as the fees have been paid in the taxable year.
To be able to claim this credit, you will need to file a form 8863 which you will attach to your 1040 or 1040A. Also, if claiming this credit you will not be able to take a tax deduction for your tuition and fees for the taxable year.
For more information and answers to all your tax related questions visit TurboTax Online today.