There are people on social media who are already posting hopeful pictures about “Harvest Time” and “Fall 2016”, and I think it might be because this summer has been a really hard one for the nation, and our world. We’ve had terrorist attacks, Zika, terrible flooding in multiple states, political turmoil, a very surreal Olympics (though seasoned with wonderful stories).

And the backdrop of it all is an election season that nobody seems very happy about on either side.

No wonder so many people want to turn the page to a new season as soon as possible.

One of the harbingers of fall is the beginning of school. Parents everywhere are rejoicing (with a healthy seasoning of the bittersweet in realizing again that the kids keep getting older!), and the school buses are starting to get busy around here.

And perhaps naturally, the federal and state governments are interested in our citizenry becoming more educated, and there are a variety of resources and regulations out there that I wanted to let you know about.

By no means is this an exhaustive rundown!

There are goodies in here both for current students, past students and even as well for prospective students (of the child and adult variety). Let me know if we can help in any specific way possible — we’re here for you!

An Overview Of Student Tax Credits, Benefits & Deductions By Kevin Roberts
“The difficulty in life is the choice.” -George A. Moore

As I mentioned above, this isn’t intended to be a fully-exhaustive list, but there are a bunch of resources for students that many of my clients and friends may not realize are available to them — and I’d like to make sure you know about them!

For Current Students
I’ll address student loans in a minute, but first let’s examine the three big tax-related benefits for current students. There are two major credits, and one major deduction. Again, this is a basic rundown, and for the sake of brevity I’m not including EVERY particular rule for each of these, just the major ones.

The Lifetime Learning Credit (LLC)
Originally passed back in 1997, this is a $2,000 credit towards qualifying college expenses that can be claimed once per tax return. Like most tax credits, with student tax credits there are income phaseouts and limits (which is why we’ll want to be smart about how and when it’s used), but the greatest benefit of it is that there is no time limit on claiming it and you only need to have taken one college course to take the credit.

The American Opportunity Credit (AOC)
This came to us as recently as 2009, as part of the original stimulus package (remember that?), and it offers up to $2,500 for each student. The income phaseouts are higher than the LLC, and it can be used for expenses beyond just tuition (like books). Also, 40% of it is refundable which means you can receive money back from Uncle Sam, even if you didn’t pay any tax! There are other restrictions, but these are the main ones.

Tuition and Fees Deduction
No fancy acronym for this one, as it’s a pretty standard one. Generally, credits are more powerful than deductions, as this one simply reduces the “income” number with which your actual tax is computed (as opposed to a credit which reduces the actual tax). But it gives up to a $4,000 deduction against tuition and qualifying fees.

There are advantages and disadvantages for each of these provisions, and you CAN take all three on one tax return — but they would have to be for a different student (no double-dipping). As usual, we’re here to help with these. In many cases, we’re already doing the thinking for you on them!

For Past Students
This can also apply for current students, but let’s briefly address student loans. As the cost of a college education continues to climb, more and more students are taking on student debt. Collectively, as a country, we currently owe nearly $1.4 trillion in student loans. That balance is growing at a rate of $2,726.27 every second.

“Good” news is that the interest is deductible. Even if you don’t itemize, you can claim up to $2,500 deducted from your income when paying interest on student loans. Generally, your lender keeps track of this for you and you’ll get a form if you paid more than $600 over the course of the year. And, of course, there are other rules (related to if you are claimed as a dependent, income phaseouts, etc.). But again, this is what we are here for!

For Prospective Students
You can take into account the above tax benefits when making your decision, as well as avail yourself of the many (many) scholarships and grants available to you.

Plus, the Department of Labor has a site that provides a bunch of great information for adult students: and

One option that may be available to you if you work for a large company is that some of them offer Educational Assistance programs, and you can receive up to $5,250 worth of benefits from an employer to pay for schooling (as long as it is “career related” or towards a specific degree). Anything above that amount would need to be recorded as income.

I hope all of this wasn’t mind-numbingly dull. It’s fun for us here at Team Roberts to think about the strategic ways to use all this stuff to save our clients on their taxes.

But we also realize that many of our clients simply want us to handle it all for them. We love that … but we also wanted to make sure you knew what was out there.

I hope this helps — and bring on the Fall!


Kevin Roberts
(502) 426-0000
Roberts CPA