North Charleston, S.C. (PRWEB) August 27, 2007
Going back to school can be expensive, but the IRS offers some relief in the form of tax credits and deductions when it comes time to file your taxes.
Theresa Bolton, a Licensed Taxpayer Representative for JK Harris, the nation's largest tax resolution company, explained, "There are several options available to students and their parents. They should investigate all of the tax credits and deductions that are available to see which one may benefit them the most. It is also important to check and see if there have been any changes in the credits or deductions from year to year."
"Although few of our clients are affected by these credits and deductions," Bolton continued, "our staff keeps up with the changes each tax year."
The Hope Credit, Lifetime Learning Credit and the Tuition and Fees Deduction are three ways that taxpayers can save money when it comes time for back to school. Another less known deduction is for Student Loan interest, which offers a deduction of up to $2,500 in interest paid yearly during the repayment period. To qualify, students must have used loan proceeds toward qualifying expenses, such as tuition, fees, room, board and supplies.
The Hope Credit is a credit of up to $1,650 per student (or $3,300 for students attending school in the Gulf Opportunity Zone in portions of Alabama, Louisiana, and Mississippi) per year and is available the first two years of college or vocational school. Expenses that are covered by the Hope Credit include tuition, required fees, minus any grants or scholarships. The credit does not cover room, board, transportation, medical fees or insurance.
The Lifetime Learning Credit can be claimed if the student is attending an eligible institution. This Credit is not based on workload and is not limited to the first two years of post-secondary education; it can be claimed during years of graduate-level schooling. This credit has no limit on the number of years it can be claimed and the student does not have to be seeking a degree to claim this credit.
"Taxpayers can reduce their income subject to income tax by claiming the Tuition and Fees deduction, however it is important to know that if you take this deduction, you can't claim either the Hope or the Lifetime Learning Credit." Bolton said. "Usually the Hope or Lifetime Learning Credit are the most beneficial to the taxpayer."
Teachers and other educators are able to take a deduction of up to $250 for any classroom expenses they pay out of pocket. This deduction comes off of the adjusted gross income and therefore, lowers taxable income. To find out more about the deduction for educator expenses, including the qualifications necessary for this deduction, check out the IRS Web site at http://www.IRS.gov. In the search field, type in the key words "educator expenses."
About JK Harris:
JK Harris & Company, LLC, (http://www.jkharris.com) based in North Charleston, S.C., is the nation's largest tax resolution firm and has served over 200,000 customers since its founding in 1997 by John K. Harris. JK Harris consultants are available to meet with consumers in over 450 locations nationwide by appointment only. The company also provides services for consumer and commercial debt, student loan debt, investment fraud, financial planning, tax return preparation, and audit representation.