If you do payday loans IL not normally file a federal tax return, you might consider filing this year. Congress continued the federal income tax credit available to students and their families with tuition and other eligible college related expenses.
If you are claimed as a dependent on another person’s (such as your parents) tax return, only the person who claims you as a dependent can claim a credit for your qualified educational expenses.
The American Opportunity tax credit applies to the first four years of your undergraduate studies. You may claim up to $2,500 for this credit if you meet the income requirements and are attending school at least half-time. Even if your income level was not high enough during the year to incur federal income tax liability, up to 40 percent ($1,000) of the tax credit can be received as a refund.
The Lifetime Learning Credit helps parents and students pay for undergraduate, graduate, and continuing education. You for qualified education expenses depending on your income level.
Depending on your individual circumstances, there are additional tax credits and deductions that may be better for you. For guidance, please consult a tax advisor.
1098-T forms
Your 1098-T form is available online through MyUW. If you have not opted out of receiving a paper copy, it will be mailed to you during the last week of January. The form will list your tuition and related fees paid in box 1. Any scholarships, fellowships, and grants you received in the prior calendar year will be listed in Box 5. If you have questions about your information, contact Student Fiscal Services.
Non-taxable income
Financial aid used solely for tuition, fees, books, and/or required course equipment and supplies is not taxable. In addition, student loans are not taxable income.
Taxable income
If you receive scholarships, grants, and/or fellowships that exceed your costs of tuition, fees, books, and required course-related equipment and supplies, you are required to report the excess funds as taxable income.Continue reading