Higher Education and Taxes

Often times I’ll start in working on a personal tax return for a client, and notice that they have a child that is college age. A quick phone call verifies that, indeed, the child is attending college. The parent had no clue that there’s a tax credit available to them. And, actually that credit is often fairly substantial.

It can be worth $2,500 for only $4,000 of tuition and fees expenses. It’s available to parents of dependent students that make less than $180,000 if filing jointly, or less than $90,000 if filing single or head of household. We’ll need a copy of the student’s 1098-T to claim the credit (which often can be downloaded from the student’s school account online), and we also prefer to have a copy of the student account that shows the tuition/fees charged by the school and paid (payment via student loans counts too!).

So, make sure you have that 1098-T for your college kid with your tax info this year!