Calling all Tax Carnivalistas!
The burden on the richest taxpayers

Filling out your pet's tax return and
paying your kids' college costs

Sorry, pet owners. The W-K9 form below  is just for fun.

Pet tax return W-K9

Thanks to TaxProf and The Bonnie & Marie Show for this faux form gem. For a better view, click the image (or link above it) to open, then click that image to enlarge.

Yes, I know. It's terribly unfair that our furry children can't be claimed as dependents so we can make use of associated tax write-offs.

Many times they cost as much as human kids to feed, care for and even clothe (I'm talking about you Paris Hilton, and all your wannabe fans!).

But while we may have to pay for obedience classes, at least there are no college costs to worry about. Of course, the tax code does offer ways to recoup some of those college costs, so I guess it's a wash.

Educated tax breaks: Speaking of those college costs, your omnipresent relative Uncle Sam can help via the tax code.

WalletPop offers an overview of the key educational tax breaks available for students and/or their parents.

In his Tax Planning Blog, William Perez takes a closer look at the newest school-related benefit, the American Opportunity Tax Credit.

For folks who' e been claiming education tax breaks for while, this one replaces, at least for 2009 and 2010 tax years, the Hope tax credit. The IRS also has a FAQ page on this new educational tax benefit.

Some oldies but goodies are still around. The Lifetime Learning Credit will get most students, including working folks going back to school to brush up on old skills or learn new ones, up to $2,000 off their tax bill. It is, however, not refundable, meaning it can zero out what you owe, but that's as far as it goes.

And the ever-popular deductions for tuition and fees and student loan interest are still available for eligible taxpayers.

Although they're popularly referred to as above-the-line deductions, these two breaks actually are adjustments to income, but that's a good thing. It means that you don't have to itemize to claim them. You'll find these tax breaks at the bottom of page 1 of your Form 1040 or 1040A.

Don't forget 529 plans. These accounts, offered by every state, allow you to put in money for your kid's higher education and its earnings accumulate tax-free. Similarly, when the money is used to pay for qualified education costs, those distributions are not taxed.

And last, and this time least because of the limited amount you're allowed by tax law save, we have the Coverdell Education Savings Account. You get no immediate tax break for placing up to $2,000 a year into this savings plan, of which your child is the beneficiary. But, as with a 529,  the money earned in a Coverdelll can be withdrawn tax-free as long as it's used to pay eligible educational costs. And in this case, this includes expenses from kindergarten to college.

Related posts:

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

debt advice

haha didnt know this was out there

Ed Darrell

The sight of the form will raise undue hopes in the hearts of all pet owners. How cruel of you!

I forwarded it to every animal lover I know.

P.S. -- the image of Uncle Sam -- is that an old cartoon? Name of cartoonist, maybe?

The comments to this entry are closed.