Education Feed

Tax credits are great tax breaks. They apply after you figure what you owe Uncle Sam and help reduce your tax bill dollar-for-dollar. Refundable tax credits are even better. As the name indicates, they can eliminate any tax you owe and any excess credit is sent to you as a refund. From an eligible taxpayer's perspective, the answer to the question about refundable credits' worth is a hearty, "Definitely!" But from a wider point of view, many argue that refundable tax credits are not the best or most efficient way to provide economic assistance to folks who qualify for the... Read more →

What child tax breaks are these?

The birth of Jesus is one of the most well-known stories. For Christians, it is, as the saying goes, the reason for the season. But even many non-believers are moved by the tale of the birth of a child in stable, with a manger serving as his crib. One of the most beautiful renditions of those humble circumstances is in What Child is This? It was a tough call, but that song barely beat out Away in a Manger for the final spot on the 2013 Christmas Tax Tip Tunes play list. Both songs celebrate the birth of a child.... Read more →

It's finally here! Everyone's favorite month. The final 31 days in which you can take steps to reduce your 2013 tax bill. What? You thought I was talking about Christmas? C'mon! If you've been reading the ol' blog for the last eight years, you know I started my tax musings by referring to any consideration of taxes as the most wonderful time of the year. And while taxes must share at least 25 of December's days with the big annual gift-giving event, this final month of the year is a great time to give yourself a smaller tax bill. So... Read more →

Jimi Clark, owner of the St. Louis Mo' Money Taxes franchise, has been sentenced to 20 months in prison for falsely claiming educational tax credits on 47 returns. Clark pleaded guilty to the charge back in July. The total loss to the U.S. Treasury due to Clark fraudulently claiming the American Opportunity educational tax credit was more than $50,000. Now I realize that 50K is not a lot in the grand scheme of tax fraud. It's nowhere near the $9 million that another tax crook pleaded guilty to perpetrating last week. Neither is 20 months an exorbitant prison term. But... Read more →

School's back in session! So are the expenses. But your favorite relative, Uncle Sam, might be able to help. There are many tax breaks that can help students, and their parents, cover education costs. The options are this week's Weekly Tax Tip. Savings plans: There are two tax-advantaged educational savings plans. A 529 plan is an increasingly popular way to pay for college costs. A recent study by education loan provider Sallie Mae found that 17 percent of families last year tapped 529 funds, the highest percentage since the study began in 2008. The numerical name of this educational savings... Read more →

Somebody remind Robert Fernandes of Oliver Wendell Holmes, Jr.'s approach to taxes. The esteemed Supreme Court Justice famously said, "I like to pay taxes. With them I buy civilization." Fernandes, however, wants to pick and choose which part of civilized society he wants to fund in his Forks Township, Pa., community. In this case, the father of three is unhappy about having to financially support public schools. Fernandes' kids are home schooled, so he thinks he shouldn't have to pony up for educating other children whose parents depend on such educational opportunities. "We don't even use the public system, yet... Read more →

Minnesota is not one of the 18 states with back-to-school sales tax holidays this year. But shoppers there still might be able to turn what they paid for school supplies into tax savings. The North Star State offers two tax breaks for school-related expenses for kindergarten through 12th grade students who attend public, private or home schools. The K-12 education subtraction works much like the federal adjustments to income, also known as above-the-line deductions. It reduces the amount of income upon which a Minnesota taxpayer must calculate state tax due. The less income, generally the smaller the tax bill. The... Read more →

College costs are getting a lot of attention right now. The fall semester is nearly here and Congress is still fighting over federally subsidized student loan rates. But instead of borrowing, a new study by educational loan provider Sallie Mae finds that today's students are relying more on money they don't have to pay back. "How America Pays for College 2013" reports that scholarships and grants are the biggest source of college funding, paying for 30 percent of costs, up from 25 percent four years ago. The average amount of such free money grew to $6,355, up from $4,859 in... Read more →

Congratulations to the new royal parents on the arrival of the future king of England. Kate Middleton, officially known as Catherine, Duchess of Cambridge, delivered an 8 pound, 6 ounce son at 4:24 p.m. today local time, 11:24 a.m. Eastern time here across the pond. The proud father, Prince William, the Duke of Cambridge, was in the delivery room. As for the royal heir's name, Buckingham Palace issued a statement that it would be announced "in due course." Even though we Americans vehemently rejected the monarchy 237 years ago, we remain fascinated by the modern royal family. And I suspect... Read more →

One of the biggest frustrations this tax filing season was the processing delay of around 600,000 returns because of improperly completed education tax credit claims on Form 8863. Although the Internal Revenue Service didn't provide any details on where the returns in question came from, many of the problematic forms were prepared by H&R Block. The Kansas City-based tax preparer didn't get specific either, but it acknowledged the error in its blog. Bill Cobb, the company's CEO and president, soon thereafter issued an online apology to customers. Now the tax preparation giant is saying it's sorry with cash. OK, with... Read more →

Happy Easter. I hope it's been, and continues to be, a wonderful day, regardless of how you celebrate this Sunday. If you have young kids, you likely have been dying eggs, hunting eggs and now are looking for ways to consume the eggs. It's also a good time to think about taxes, not only your current tax return, which is due in just a couple of weeks, but also some tax planning. Photo by Gabriele Corno So on this egg-centric day, today's Daily Tax Tip looks at ways to spread your tax planning eggs across different baskets. Specifically, you should... Read more →

You know it's the heart of tax-filing season when my blogging gets jammed up. That's what happened last weekend when I missed my regular last week at my other tax blog post. That's my story and I'm sticking to it! So in addition to the regular look at what I posted last week at Bankrate Taxes Blog, I'm posting what I posted the week before. Let's just call it last last week at my other tax blog. First was a look at the ways governments use tax policy to shape individual actions and attitudes. Currently, taxes on weapons, both ammunition... Read more →

Roseanne Roseannadanna might have been talking about every tax filing season when she proclaimed "It just goes to show you, it's always something. If it ain't one thing, it's another." That's certainly the case for the 2013 tax season, which started late and has been rolled out in stages depending upon what forms you need to file. And just when we thought things were finally on track with the Internal Revenue Service's final document updates, the craziness that is this year continues with problems for some TurboTax and H&R Block customers. NOTE: UPDATES are included in the specific company issues... Read more →

Can the 2013 tax-filing season get any more messed up? Apparently so. It started late (on Jan. 30) because Congress couldn't do its fiscal cliff job in a timely manner. That meant delays as the Internal Revenue Service had to scramble to update more than two dozen 2012 tax forms and upgrade its computer system to handle them. Then a form that was OK to file, the Child Tax Credit's Form 8812, caused some confusion among taxpayers, producing delays for the returns to which it was attached. And now a form for which thousands had to wait until mid-February to... Read more →

The Internal Revenue Service has a Valentine present for folks claiming an education tax credit. The agency has announced that on Thursday, Feb. 14, it will start processing 2012 returns that contain Form 8863, Education Credits. This form is used to claim two higher education credits, the American Opportunity tax credit and the Lifetime Learning tax credit. The American Opportunity credit, you might recall, was set to expire at the end of 2012. But it was given new life as part of the American Taxpayer Relief Act of 2012, aka ATRA or the fiscal cliff bill. This education credit, which... Read more →

It kind of was overshadowed by yesterday's Super Bowl, but Sunday, Feb. 3, was a big day in the tax world. It marked the 100th birthday of the modern tax code. Actually, it was the day 100 years ago that the 16th Amendment, the one that authorized the federal income tax as we know it, was approved by Delaware. The anniversary also gets By the Numbers honors this week. That vote on Feb. 3, 1913, by Ocean State lawmakers gave the amendment the requisite 36 state approvals, making it constitutionally legal. It's no secret that many folks, including some in... Read more →

Tax filing season 2013 finally begins tomorrow, Jan. 30, for most people. But if you want to claim an education tax credit, you'll have to wait a bit longer to send your tax paperwork to the Internal Revenue Service. The IRS says its computers won't be able to accept Form 8863, which is required to claim the American Opportunity or Lifetime Learning tax credits, until mid-February. And the wait gets longer for other forms. The IRS says in the notice on its tax forms and publications Web page (and pictured below) that it's working as "quickly as possible" to update... Read more →

The family's gathered for Thanksgiving. It's great to see Mom and Dad, the grandparents and especially the kids who've been off at college. Here's one more thing to be thankful for. You can pay your happy-to-be-home student's spring 2013 semester tuition by the end of 2012 and then use those expenses to claim education tax breaks. The education assistance you should be looking at is the American Opportunity education tax credit. Exhausted student photo by D Sharon Pruitt (aka Pink Sherbert Photography via Flickr Creative Commons) You can claim it based on qualified education expenses you pay for yourself, your... Read more →

Every fall the Internal Revenue Service announces the upcoming inflation-based adjustments to tax provisions millions of taxpayers use. Not this year. Oh, the IRS did issue its annual revenue procedure -- Rev. Proc. 2012-41 -- last week, setting forth inflation-adjusted items for 2013. But there's a big hole in this year's announcement. Section 2 usually notes some key changes for the coming tax year. This year, however, the IRS takes advantage of the section to tell us what isn't in Rev. Proc. 2012-41. This revenue procedure does not include the following items: the tax rate tables under §1 of the... Read more →

Do you sometimes feel left out when folks talk about tax breaks. Schedule A gets so much attention and you've never filed it. Don't despair. You are actually in the majority. Internal Revenue Service data reveals that around two-thirds of tax returns claim the standard deduction amount each year. And the tax code has something for all y'all standard deduction filers. They're known officially as adjustments to income. But they're popularly called above-the-line deductions because you claim them in the "Adjusted gross income" section found at the bottom of the first page of both Form 1040 and Form 1040A, just... Read more →