Living in St. Petersburg and Tampa, we have access to some great colleges and universities. Many people come to the Bay Area specifically for school! With that, tax preparation in St. Petersburg often means taking into account costs associated with obtaining that certificate or degree. Here are some tax tips for individuals pursuing higher education and how it can help lower your tax bill!
Two educational credits are available to taxpayers. They are both refundable or partially refundable. They can also potentially help with the cost of higher education. These credits do this by reducing the amount of tax owed. If the credit reduces tax to less than zero, the taxpayer may get a refund.
The credit can apply to taxpayers, their spouses or their dependents who take post-high school educational courses in 2019. To be eligible, the student must receive a Form 1098-T from an eligible education institution. Taxpayers use Form 8863, Education Credits, when they file their 2019 tax returns.
The American opportunity tax credit is:
- Worth a maximum benefit up to $2,500 per eligible student.
- Only for the first four years at an eligible college or vocational school.
- For students pursuing a degree or other recognized education credential.
Partially refundable. This means if the credit brings the amount of tax owed to zero, 40 percent of any remaining amount of the credit, up to $1,000, is refundable.
The lifetime learning credit is:
- Worth a maximum benefit up to $2,000 per tax return, per year, no matter how many students qualify.
- Available for all years of postsecondary education and for courses to acquire or improve job skills.
- Available for an unlimited number of tax years.
Both credits begin to phase out for taxpayers whose modified adjusted gross income exceed certain levels. Be sure to consult with an accountant to see how these credits might affect you. Contact us for more information on what tax deductions and credits you might qualify for. Hiring an experienced accountant for tax preparation in St. Petersburg can ensure that you get the most out of your tax return.