Going to college can be expensive. There are a lot of things to pay for, such as your tuition, fees, some place to stay and eat, and supplies. With the rising cost of college going up and up, most students find that they have to take out loans with high interest rates just to stay in school. Of course, it would be better to pay for school as you go, but with the costs rising and all the work that comes from attending classes, it is hard to find a job that will make this a reality.
The good news is there are some deductions that you can qualify for when it is time to work on your tax return. If you have gone to school in the past year or you are working on paying off those student loans, it is easy to find some great deductions that are going to save you some money. When you are ready to work on that tax return and want to make sure you are getting all of the deductions possible, make sure to contact the professionals at 1-2-3 Financial Services to get started on the right track.
Student Loan Interest
Whether you are still in school or you have just finished and are at some point in the line of paying off your student loans, you will be happy to know there are some deductions that can give you relief from all of these payments. The IRS allows you to take a deduction of up to $2500 if you pay this much or more on your student loan interest through the year. This could be a huge savings that could help you pay off more student loans later on or help with some of your other bills.
There are some income requirements that need to be met with this and you will not be able to claim more than the $2500 each year, even if you paid more than this on your tax return. Despite the limitations, this is a great way to save some money on those student loans that are going to follow you around for years to come. Keep in mind that you are able to make this deduction even when you are still in school so consider making interest payments, if not more, when you are still in school.
Tuition Expenses
If you pay some of your tuition out of pocket, you may be able to deduct this as well. The tuition is the amount that you pay to take certain credits, such as the cost of the class, plus any fees that may come with the class or for joining the school. If your scholarships and other financial aid pay for some of this, you will not be able to include it into your deductions. Only the amount that you paid out of pocket can be deducted. Make sure that you keep good records of how much you spent so you don’t end up missing out on this important deduction.
One thing to keep in mind with this is that you can only deduct the tuition and expenses. If you pay for room and board at the college or your own apartment off of campus, you are not allowed to include these on your deduction. Those are daily life expenses and not college expenses so the IRS does not allow you to claim these on the tax return at all.
If you need help figuring out how much you are able to deduct on your tax return or you would like to learn about some of the other educational expenses that you can save on your tax return, make sure to contact the professionals at 1-2-3 Financial Services as soon as possible.
Book Expenses
In order to attend your classes and do well, you are going to need some books as well as some other supplies. But since most teachers want to go with the brand new edition of a book and pick one that is really obscure all the time, you often have to spend a lot of money to get these expensive books brand new. This can quickly cost you over $1000 a semester just to get the books for a few classes.
If you are able to keep the receipts that you have for purchasing these books, you could save some money when it is time for tax season. Books and supplies that you bought with your own money, not with scholarships and other aid, can be deducted on your tax return. Even if you don’t keep the books after the semester is over you will find that it is a lot easier to save some money on college if you keep track of your receipts and use this deduction for the important books you have to have to complete your course.
Going to college is an expensive endeavor. While this is the best way to get set up for your future, you will find that coming up with the funds that you need to be successful can be a challenge. When you are ready to learn how you can save money on some of your college expenses, make sure to contact Louis Vestano at 1-2-3 Financial Services in Warwick, RI. We can help you to understand some of the best deductions for your needs so you can save money and keep working hard on that degree.
1-2-3 Financial Services, Inc.